Gov't sets investment limits on pension funds

The government has adopted a resolution regulating how private pension funds (OFEs) will be able to invest their assets starting February 1. According to the resolution, OFEs will have to invest at least 75 percent of all their assets in the stock market until the end of 2014, 55 percent throughout 2015, 35 percent until the end of 2016, and 15 percent until the end of 2017. “The purpose of the limits for private pension funds is to ensure the reform causes as little turbulence on the stock exchange market as possible,” said Mateusz Szczurek, finance minister. “The government does not want to see a mass sell-off of shares,” Szczurek added. The resolution is a part of a major pension system overhaul, which saw the transfer of all treasury bonds in OFEs portfolios to state-run social security institution ZUS (altogether 51.5 percent of OFE assets). The reform also prohibits OFEs from investing in government debentures in the future. The government has also set various limits aimed at ensuring the safety of OFEs’ investments. No pension fund will be able to buy more than 20 percent of a single shares issue; 10 percent if the fund already has a major involvement in the issuing company (if the company’s shares stand for more than 2 percent of the fund’s assets). The resolution also dictates that 0.3 percent of assets in each OFE are to be transferred to a state-controlled Guarantee Fund, which will invest the money in various debentures.