Don’t wait for quick mergers of pension funds

In early September, the non-state pension fund for the energy sector announced the merger of Wimm Bill Dann and Vernost. The unification negotiations lasted for almost a year. The procedure began in September last year, in April 2012 it was approved by the State Service for Financial Markets, and in June it was finally approved by the Federal Antimonopoly Service. According to the participants in the transaction themselves, such a lengthy merger procedure is quite normal practice..

The non-state pension fund for the electric power industry was founded by 82 enterprises, which are mainly represented in the energy sector. The fund has 529,000 members, making it one of the largest foundations in Russia. As of today, almost no fund merger deals are made on the pension market. In 2011, there was a merger of the non-state pension funds Rus and Promagrofond, but such a merger was entirely an initiative of Rus, which lost its license from the Federal Service for Financial Markets and was forced to transfer the affairs of its 284,000 clients to another fund..

In the opinion of the market participants themselves, the suspension of the fund amalgamations caused a dispute between their regulators regarding the preservation of the funded component. So far, this situation has not caused panic in the market, but, obviously, if negotiations were underway on the merger of funds, they were frozen or will be frozen for some time. The heads of non-state pension funds are waiting for the decision of the authorities in choosing a strategy for the development of the pension system and its accumulative components.

According to the chairmen of non-state pension funds, captive funds, developing mainly corporate pension programs of organizations, will receive benefits from the authorities. Experts argue that such a measure may lead to an increase in the number of mergers and acquisitions. If the authorities choose a radical option and cancel the funded part, the founders of the funds will be able to sell them to larger non-state companies. When choosing a less radical option with a reduction in contributions to the funded part (now the percentage of contributions is 6% of wages), this measure can have a strong negative impact on the economy of market-based non-state pension funds, which can also contribute to their merger with larger funds.

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