Private Pension Funds Perform Well

The net value of assets owned by Ukrainian private pension funds (PPF) more than doubled in 2007, reaching 278.5 million hryvnias, according to Valeriy Alyoshyn, head of a regulatory commission for financial services.

As of December 2007, the assets of 10 funds exceeded 10 million hryvnias, including 7 open-end funds, 2 corporate funds, and one trade pension fund.

The pension funds assets’ structure also changed. As of December 2007, bank deposits accounted for 38.6 percent of the assets. Bonds issued by Ukrainian companies made up 23.8 percent of the assets, half of the 2006 figure. The shares of Ukrainian companies constituted 25 percent of the funds’ assets, twice as much as in 2006. The average return on pension assets dropped from 17.1 percent in 2006 to 16.1 percent in 2007.

According to Alyoshyn, returns fell due to the world financial crisis which has affected Ukraine, too. He also indicated that in the end of 2007, new regulations were introduced which limited the funds’ investment opportunities, especially regarding investments in lower-tier stocks.

In 2007, the number of PPF which had the status of a financial institution increased by 17, or 21.5 percent over the year before, to reach 96 funds – including 75 open-end funds, 13 corporate funds and 8 trade pension funds. The total number of PPF participants rose 44.2 percent in 2007 to reach 278,687. As of Jan. 1, 2008, the number of depositors increased 43.6 percent year-on-year, to 42,315. The number of corporate depositors reached 1,764, compared with 1,098 on Jan. 1, 2007. The number of individual depositors soared 42.9 percent year-on-year, to 40,551 persons.