Pension funds - 9.5 pct profitability rate in Q1

Mandatory private pension funds (Pillar II), with more than five million contributors in Romania, posted an average profitability rate of 9.5 percent in the first quarter of 2010 and of 24.2 percent in the past 12 months (March 2009 - March 2010), according to the Association for the Privately Administered Pensions in Romania.

The annual average gain since launch and up to present for all the mandatory pension funds is of 17.7 percent.

By comparison, the inflation target for the entire 2010 of Romania's National Bank is of 3.5 percent. In 2009, the average bank interest rate for population lei deposits stood at 12.5 percent.

The optional private pension funds (Pillar III), with more than 193,000 contributors, scored an average investment performance of 9.1 percent in the first quarter of 2010 and of 23 percent in the past year. The annual average gain since launch and up to present of the optional pension funds stood at 10.2 percent.

According to Agerpres, the main growth engines for those profitability rates were the stocks and corporate bonds held by the private pension funds. At the same time, the significant reduction of the interest rates on the domestic market led to the appreciation of the real value of state equities in the pension fund portfolios.