Pension funds feel the squeeze as bill will thin down numbers and margins

The euro 6 billion pension funds industry is now facing accelerated consolidation now that the government approved a new bill which might cut the income of the smallest funds. Deputy Labor Minister, Krzysztof Pater, told reporters that the number of pension funds could shrink down to even eight from the current 17. He confirmed earlier reports that the bill might slash the sector's revenues by as much as 20% over the next 18 years, with the smallest funds suffering the biggest losses. The bill, approved by the Cabinet last month, envisages that the fee for assets management will drop to 0.033% of assets value per month, from the current 0.05% and the charge on premiums will gradually decrease to 3.5% in 2014 from 7%. Funds likely to be merger include Sampo, a unit of Kredyt Bank, as well as the Bankowy pension fund owned by Citigroup's Bank Handlowy and PKO BP. (Reuters) A.K.