Oancea: Fresh merger talks in the coming year

Nine or ten administrators will remain on compulsory private pensions market (Pylon II) after merger and acquisition talks and 2009 will be the year of decisions on market concentration and especially on mergers, said Mircea Oancea, chairman of CSSPP.

“Some 9-10 players will actually remain on pylon II”, said the head of CSSPP, who sees a one-third reduction of number of players in the market, of 14 active.

Oancea said the merger talks between pension funds “will take place next year” even if the deals will not be completed in 2009.

“From our point of view, the year 2009 has to be crucial as far as the market concentration decisions are concerned”, said Oancea (photo), quoted by NewsIn.

The merger process of the funds (regulated by 14/2008 regulation) sets forth the six-months minimum length of the merger procedure, since the company made the decision of merging until the completion and approval by the Pension Commission of the deal, CSSPP’s chairman explained.

“At the end of 2009 we will probably see a 9-10 players remaining market”, Oancea added.

Administrators will “preserve” assets in 2009 in fixed-income instruments.

According to regulations of temporary modification of the top limit of investments, the administrator can choose to invest the money in state-owned securities, treasury certificates or government bonds, regardless to the falling due or maturity of the financial instruments.

The measure was adopted as a response to international turmoil. “Almost all administrators notified the Commission that they had decided to use the derogation period. It is a compliance period at this point, a period when investments of newly-entered players are focusing on fixed-income investments”, Oancea stated.

“I believe we will see more fixed-income investments in the coming period, at least in the first half of next year, namely state securities with below-a-year-to-five-years maturity”, he added.

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