The bank's main competitors, Banca Comerciala Romana (BCR) and BRD-Groupe Société Générale, have already announced they will establish funds to administer mandatory pensions. The new pension legislation, passed last year, is meant to redirect a portion of state pensions to the pri- vate sector. Thus, part of the mandatory employee contribution to the pension system is to be transferred to private administrators as of 2008. In the August-November 2007 period, employees under the age of 35 will be ob- liged to choose a company to administer their mandatory private pension. As the program goes into effect in less than one month, banks are rushing to enter this financial segment.
Raiffeisen was to decide yesterday whether it would create a company for fund administration or a bro- kerage company to deal with mandatory pensions. So far, four banks have decided to create companies to administer mandatory pensions. Beside BCR and BRD, MKB Romexterra and OTP Bank plan to enter this market.
Raiffeisen will also enter the optional pension market, with its own division for investment administration, Raiffeisen Asset Management. The division, created last year, currently administers some €40 million and has a 15.5 percent share of the mutual funds market.
