Ad agencies see potential boom from new pension funds
It looks as if the initial start-up date of January 1999 still will hold. The computer snafus between the government and Prokom, which is shaping the new system of individual retirement accounts, appear to have been ironed out. The government has approved the final framework of the pension reform system and sent it to Parliament and, while it could be derailed there, it seems as if too many key parties already have bought into it.
That means that most of the future financial players are putting on their running shoes and planning for a frenetic nine months ahead of them. The investment funds still on the fence about whether to try and apply for a pension fund license will "probably have to decide by the end of May. After that, it's really too late," says CAIB Securities CEO in Poland, Wolfgang Bauer.
CAIB is leaning toward getting in, probably with a Polish partner, although no final decisions have been made. Pension licenses go to specially formed pension funds - not to insurance companies or investment funds or banks or brokerages.
That means lots of legal and financial and administrative work to set up that separate structure and to get an application for a pension fund license into the government by August.
"We'll apply for a license, that's already been decided," says Tomasz Orlik, director of the pension fund department of the Pioneer mutual fund operation here. For now, they are going it alone, not with a Polish partner.
Their competitors in the Corona mutual fund still are on the fence - but they didn't think Pioneer had ruled out the local-partner option. Corona is still debating that issue, as well.
Orlik says the law is silent on the question of whether a foreign-based investment fund or bank can create a wholly owned pension fund, and get a license, without a Polish partner. It may be a political, not a legal issue, but there is no one addressing that question, and the answer may be known only when licenses are granted. Or are not.
And the advertising agencies?
Well. They're staring at big business that hasn't been seen since the giant GSM wars. The reason? Six million Poles will have to make a conscious decision on which of the licensed pension funds they want to affiliate with.
This is everyone under the age of 31. Future pension contributions will go to that individual account in a specific pension fund. There may be three dozen applicants for pension fund licenses, and there could be as many as two dozen licenses given out. That means 24 funds chasing the retirement accounts of six million Poles, and within a compressed period of time, this fall.
"It will be big, bigger than anything we've seen since the GSM companies started competing," says Bates Saatchi&Saatchi regional media director Ivan Jones.
Pioneer's Orlik, in fact, says that he heard that the advertising budget of pension funds in Mexico increased five-fold "so they could be better noticed in the media." He said Pioneer hasn't decided how much, and where, it will spend on advertising.
"What you can be sure of is that there will be a huge advertising campaign in the newspapers and a lot of commercials on TV and that every company will spend millions of dollars on this."
And therein lies another issue. Advance arm-twisting is already underway by insurance companies, Orlik says. Corona's marketing director Romana Rucinska is agitated about the same thing.
"Life insurance agents already have started to collect 'pre-applications' and to round up their potential clients for their pension funds. Agents are using their data base (of existing insurance clients) to sign them up for pension funds with a kind of 'commitment' letter."
Will Pioneer follow suit, with its own base of investors in the "retirement investment plan" which the mutual fund has been offering for years? Nope, says Orlik. "We will wait until we get a license." And then the recruitment will begin in earnest.
lll
Pawel Wojciechowski, president of investment fund Atut (among his many jobs), says the bidding war for the Polski Bank Rozwoju (PBR) points up the fact that the new securities law left the securities commission without some intervention tools it had under the old law.
As in: if Securities Commission (KPWiG) Chairman Jacek Socha wanted to curb the bidding war for shares of PBR - it's not clear he had any legal authority to do so. Sweden's Skandinaviska Enskilda Banken (S-E-Banken) and Bank Rozwoju Eksportu (BRE) and, at least initially, German bank Bayerische Landesbank (BLB) had been upping the per-share prices since mid-April.
"Under the new securities law, there is no delegation of the executive authority from the council on ministries to the securities commission," if the commission wanted to curtail the length of time of the bidding war.
Theoretically, Wojciechowski says, "it could go on for months."
Wojciechowski also talked, at a EuroForum securities conference, on the significant growth in investment funds. For years, there was only Pioneer. Then, a year ago, there were seven mutual funds. "And now there are 37 funds on the market."
That means that most of the future financial players are putting on their running shoes and planning for a frenetic nine months ahead of them. The investment funds still on the fence about whether to try and apply for a pension fund license will "probably have to decide by the end of May. After that, it's really too late," says CAIB Securities CEO in Poland, Wolfgang Bauer.
CAIB is leaning toward getting in, probably with a Polish partner, although no final decisions have been made. Pension licenses go to specially formed pension funds - not to insurance companies or investment funds or banks or brokerages.
That means lots of legal and financial and administrative work to set up that separate structure and to get an application for a pension fund license into the government by August.
"We'll apply for a license, that's already been decided," says Tomasz Orlik, director of the pension fund department of the Pioneer mutual fund operation here. For now, they are going it alone, not with a Polish partner.
Their competitors in the Corona mutual fund still are on the fence - but they didn't think Pioneer had ruled out the local-partner option. Corona is still debating that issue, as well.
Orlik says the law is silent on the question of whether a foreign-based investment fund or bank can create a wholly owned pension fund, and get a license, without a Polish partner. It may be a political, not a legal issue, but there is no one addressing that question, and the answer may be known only when licenses are granted. Or are not.
And the advertising agencies?
Well. They're staring at big business that hasn't been seen since the giant GSM wars. The reason? Six million Poles will have to make a conscious decision on which of the licensed pension funds they want to affiliate with.
This is everyone under the age of 31. Future pension contributions will go to that individual account in a specific pension fund. There may be three dozen applicants for pension fund licenses, and there could be as many as two dozen licenses given out. That means 24 funds chasing the retirement accounts of six million Poles, and within a compressed period of time, this fall.
"It will be big, bigger than anything we've seen since the GSM companies started competing," says Bates Saatchi&Saatchi regional media director Ivan Jones.
Pioneer's Orlik, in fact, says that he heard that the advertising budget of pension funds in Mexico increased five-fold "so they could be better noticed in the media." He said Pioneer hasn't decided how much, and where, it will spend on advertising.
"What you can be sure of is that there will be a huge advertising campaign in the newspapers and a lot of commercials on TV and that every company will spend millions of dollars on this."
And therein lies another issue. Advance arm-twisting is already underway by insurance companies, Orlik says. Corona's marketing director Romana Rucinska is agitated about the same thing.
"Life insurance agents already have started to collect 'pre-applications' and to round up their potential clients for their pension funds. Agents are using their data base (of existing insurance clients) to sign them up for pension funds with a kind of 'commitment' letter."
Will Pioneer follow suit, with its own base of investors in the "retirement investment plan" which the mutual fund has been offering for years? Nope, says Orlik. "We will wait until we get a license." And then the recruitment will begin in earnest.
lll
Pawel Wojciechowski, president of investment fund Atut (among his many jobs), says the bidding war for the Polski Bank Rozwoju (PBR) points up the fact that the new securities law left the securities commission without some intervention tools it had under the old law.
As in: if Securities Commission (KPWiG) Chairman Jacek Socha wanted to curb the bidding war for shares of PBR - it's not clear he had any legal authority to do so. Sweden's Skandinaviska Enskilda Banken (S-E-Banken) and Bank Rozwoju Eksportu (BRE) and, at least initially, German bank Bayerische Landesbank (BLB) had been upping the per-share prices since mid-April.
"Under the new securities law, there is no delegation of the executive authority from the council on ministries to the securities commission," if the commission wanted to curtail the length of time of the bidding war.
Theoretically, Wojciechowski says, "it could go on for months."
Wojciechowski also talked, at a EuroForum securities conference, on the significant growth in investment funds. For years, there was only Pioneer. Then, a year ago, there were seven mutual funds. "And now there are 37 funds on the market."
