Commercial Union Pension Fund, the largest on the market, has reduced the fee charged on contributions to customer accounts for its clients from 10% to 8.5% during the first two years of membership.
Commercial Union Pension Fund, the largest on the market, has reduced the fee charged on contributions to customer accounts for its clients from 10% to 8.5% during the first two years of membership.
From the third year, CU Pension Fund's fee is 4% - the lowest on the market. The net value of the fund's assets is over 10bn zlotys (Ł 1.6bn). Commercial Union Pension Fund Company, which manages the fund, is one of the most successful companies in Poland, as was confirmed in the league tables published in "Gazeta Bankowa”, a Polish financial weekly, and “Parkiet”, a newspaper for stock market investors, during the past few weeks.
Management of the largest pension fund on the market is the most important project undertaken by the Commercial Union Poland group within the field of a public-private partnership.
"We treat the concept of a public-private partnership very seriously. It is immensely important for the successful development of the country and requires strict observance of the principles accepted by both parties to the contract. We are careful to ensure that the long-term benefits from the efficient operations of the private organisation should be enjoyed by as many people as possible. This is why, yet again, we have decided to introduce changes to the CU Pension Fund articles, intended to lower the cost to the fund members," said Jarosůaw Myjak, chief executive, Commercial Union Poland group.
Reducing the fee for the first two years of membership will be based on an appropriate change in the CU Pension Fund articles following an approval of the Insurance and Pension Fund Supervisory Committee, the industry regulator in Poland. "This reduction will affect a large number of the more than two-and-a- half million members of CU Pension Fund," said Piotr Szczepiórkowski, general manager, CU Pension Fund Company.
Included in the changes will be more detailed definitions of transaction fees charged by the fund on foreign investments, which should allow for greater investment flexibility and more effective portfolio diversification.
The Annual General Meeting of CU Pension Company held on 28 April 2003 appointed Krzysztof Cetnar as board member responsible for finances. Tomasz Belka, strategic planning director of CU Poland, was appointed as a member of the CU Pension Fund Company supervisory board.
On 5 May 2003, the value of CU Pension Fund assets exceeded 10bn zlotys (Ł1.6bn). In this respect, with an approximate 29% market share, the fund continues to hold its leading position. At the end of April, Polish treasury debt securities constituted over 71% of the portfolio, and equities amounted to 24%. The remainder was made up of bank deposits, corporate bonds and other receivables.
Four years of CU Pension Fund Company's operations now make it possible to state the Company's mission:
- By managing the largest pension fund, we are building long-term savings for our clients and contributing to the economic growth of the country. We want to be a useful and efficient organisation, subscribing to the best aspects of market practices and providing friendly service and intelligible information. Our success is based on client satisfaction and trust, for this is what makes our work meaningful and adds to the value of our brand and our company.
CU Pension Fund's high reputation among clients is further underlined by the fact that during the first four months of 2003, the number of its members increased by over 50,000. CU's insurance agents played the main part in attracting new clients.
Recently published league tables of Polish companies, ranked Commercial Union Pension Fund Company as a leader from the point of view of financial effectiveness on the basis of its 2002 results. CU Pension Fund Company took second place as regards its profitability index in the "Gazeta Bankowa” List of 500 Largest Companies.
The index showing the relationship of gross profit to revenues was 22.1% and that of the net profit to revenues amounted to 28.8%. CU Pension Fund Company also rated 5th among the twenty most effective financial institutions in Poland in 2002 (point classification based on indices of the rate growth and effectiveness).
CU Pension Fund Company's last year's financial results were particularly good, but this was partly connected with two one-off effects. "In addition to the 25m zlotys (Ł4m) representing operating result, the net profit of 58m zlotys (Ł9.2m) was also due to a high, 19-million (Ł3m) profit from the Pension Fund Company's investments of free assets in treasury bonds as well as realisation of a 14-million (Ł2.2m) tax asset. This resulted from losses incurred by the Pension Fund Company early in its operations," explained Mr Szczepiórkowski. The good operational results are due to the economies of scale, moderate acquisition costs and limited marketing expenditure in 2002.
The CU Pension Fund Company would still have shown very good profitability for 2002, with 18.3 percent return on capital, even if the one-off profits were not taken into account. "We anticipate that the Pension Fund Company will make back all its earlier losses in 2003 and that, after 5 years of operations, the company's equity capital value will correspond to the shareholders' investments," stressed Mr Szczepiórkowski.
In 2002 the CU Pension Fund was awarded the European Medal and won first place in two league tables of pension funds published in ”Rzeczpospolita”, a leading quality newspaper, and, once, in a similar league table in “Super Express”, Poland’s best-selling tabloid. Customer services are provided via a call centre, the internet, an ATM card allowing clients to check balance of their pension fund account, and by post.
The free on-line service makes it possible for each client to trace the balance and history of his account on the internet and it also provides general information about CU Pension Fund's investment activities. It is also possible to send details required to join the fund via the internet.
For further information please contact: Grazyna Goslings, Corporate Communications Director of the CU Poland Group, tel: +48 22 557 40 93, fax: + 48 22 557 40 26, e-mail: bohdan_bialorucki@cu.com.pl. Additional information about the Commercial Union Poland group can also be found on the web page http://www.cu.com.pl