For the first time, Russians have been given the chance to assess the performance of various trust management companies in managing pension funds. The Agency AK&M, by the Russian Pension Fund's order, calculated the profits of various trust management companies earned for their customers.
The pension reform started in 2002, when employers began to transfer to the Russian Pension Fund 2-6% of wages of their employees born after the year 1967. This money is invested in securities and when employees reach retirement age it is to be paid to them together with basic and insurance portions of their pension. At the first stage the Russian Pension Fund itself was responsible for investing pension savings and in the initial stage delivered a phenomenal performance: due to the rise in prices for government bonds over a year and a half since April 2002 it earned almost 50% for would-be pensioners.
In 2003, private companies were given access to managing pension funds. It was up to Russians to decide whether to leave their money with state-owned Vnesheconombank or to transfer it to one of the trust management companies selected by the government. Most people proved to be very cautious: of almost 100 billion rubles raised by the Russian Pension Fund for 2002-2003, private companies accounted for less than 4%. But they did not fall into despair hoping that their strong performance would convince Russians to transfer their money to them. After all, they were authorized to invest pension funds not only in government securities like VEB but also in corporate securities and even in shares.
But so far people have not been able to assess various companies' performance - the Russian Pension Fund did not tend to disclose specific companies' performance and they can't do it themselves without the Fund's permission.
Yesterday we got to know for the first time how much money trust management companies earned in the last year - the Agency AK&M calculated the amount by the Russian Pension Fund' order (see the table). The calculation was difficult to make because the companies received money in two stages - in March and in October. And these figures do not show incomes from investing pension funds but show their absolute growth during the management period, explains Ekaterina Chumakova, MinFin's Pension Reform Department Head adding that this indicator enables us to assess trust management companies' performance, with no other indicators being available so far.
Private trust management companies' performance for the previous year proved to be rather disappointing. Russian Pension Fund Deputy Chairman Alexander Chernoivan said that a half of private companies managed to earn 0-2% and only 12 of 55 companies succeeded in overtaking VEB with its 3.6%, with six companies suffering losses. Among them was one of the leaders in trust management market, namely, Trust Management Company Troika Dialog. AK&M's figures came as a surprise to its president Pavel Teplukhin. "We should have delivered strong performance," he says in bewilderment. Trust management Company Metropol delivered the best performance - almost 12%. The company's portfolio manager, Andrei Bespalov declined to reveal the secret of their success.
Chumakova from MinFin is sure that people will take these figures into account upon choosing a trust management company to transfer their pension savings to. "Most citizens will be choosing a company on the basis of investment incomes but they should bear in mind that high investment incomes in the past do not guarantee the same high incomes in the future",-she says. At the same time VEB's Trust Management Department Director Alexander Popov believes that the state trust management company's share in pension funds will decline by 3% annually.
Most companies' poor performance are attributable to unfavorable circumstances and the terms of pension reform says Alfa Kapital Chief Managing Director Anatoly Milykov. Trust management companies received money in late March just before the stock market reached its peak. Since April 1, RTS index lost more than 15%. "We received the first portion of the money when the market was at its peak",- complains Milykov adding that a list of securities authorized for investing pension funds proved to be too limited.
This year trust management companies are unlikely to improve their performance, warns Milykov. Bonds' growth potential, in his opinion, has been fully realized and we should not expect high incomes from blue chips. A.Bespalov believes that Russians' pension savings will grow faster than in 2004.
Vnesheconombank Chairman Informed the Russian President of VEB's Performance
Moscow. May12. INTERFAX - Russian President Vladimir Putin held a working meeting with Vnesheconombank Chairman (VEB) Vladimir Dmitriev.
The Photo of the Pesident of Russia Press Office
At the meeting with the Russian President V. Dmitriev said that VEB is the oldest Russian financial institution and it marked its 80-th anniversary last year.
"By quantitative and qualitative indicators the Bank's standing is stable and it is among Russia's first ten banks and by a number of other indicators it is among the first five Russian banks", - Dmitriev said.
He also said that the Bank acts as the agent for managing Russian foreign debt in close contact with the MinFin. The Bank also succeeded in reducing the debt burden on GDP from 40% seen several years ago to 18% last year.