Capital Pension Funds: the Changing Role in South and Eastern European Countries

Rapidly changes are occurring in the economies of South-Eastern European countries. Some areas are still undergoing reforms or are planned to be reformed. Such an area is the pension system. Capital pension funds are re-functioning from 21 years. At the end of 1990s the development of the insurance for capital pensions was regarded as compulsory element of the pension security. The last financial and economic crisis leads to some re-thinking of their role. Hungary nationalized huge part of the assets. Poland is rechanneling the bulk of the money back into the state social fund. Bulgaria, Croatia and Romania are closer to further developing the sector insurance rather than diminishing its role. The Czech Republic is more or less neutral. What are the reasons for the differences – political, social or economic in nature? The paper deals with the role of insurance for capital pension in the whole pension system in these six countries. Issues such as administrative costs, asset management results, practice of the good corporate governance and risk management are addressed. The study searches answers to questions such as what part of pension security has to be for capital pensions and what kind of state supervision should be carried out.