NPF pension funds reach 4.27 trillion rubles in 2019
In 2019 Q4, the pension savings of non-governmental pension funds (NPFs) surged 2.4% to reach 2.86 trillion rubles as of the end of 2019. At the same time, pension reserves rose 3.5% to 1.41 trillion rubles. This is evidenced by the data shown in the information and analytical commentary ‘NPF Market Trends’. Therefore, in Q4, NPF pension funds increased by 2.8%, to 4.27 trillion rubles.
Investments in the real sector of the economy still prevail in the structure of pension savings portfolio: at the end of 2019, their share was 38% (a growth of 0.9 pp in Q4 and 2.7 pp YoY). In the portfolio of pension reserves, funds are being reallocated to the real sector from the public and financial sectors: in Q4, investments declined by 2.6%, to 250.3 billion rubles, into the former and by 1.7%, to 689.33 billion rubles, into the latter. The share of the real sector in the pension reserves portfolio reached 33.5% (a growth of 3.6 pp in Q4 and 4.8 pp YoY).
The amount of pension savings invested in the real sector grew in Q4 by 4.8%, to 1.087 trillion rubles, while that of pension reserves surged by 16.3%, to 474.65 billion rubles. A number of high-credit-quality real sector issuers offer a premium over OFZ rates, and pension funds have taken advantage of that amid rising prices for debt instruments. NPFs continue to increase their investments in the metallurgical, manufacturing, communication, and telecommunications and information technology sectors.
2019 Q4 saw a continuing upward trend in the value of debt instruments in NPF portfolios, namely of corporate bonds and government securities. Investments in corporate bonds comprise over a half of all pension savings (1.47 trillion rubles; 2% growth QoQ) and over 40% of all pension reserves (629.69 billion rubles; 7% growth QoQ). In Q4, the amount of pension savings invested in shares increased by nearly 14%, to 177.3 billion rubles, mainly owing to the positive dynamics in the stock market and growing investments in equity instruments. Investments in shares comprise 6.2% of pension savings and 11.3% of pension reserves.
The amount of pension savings allocated in government securities increased by 6.8% (to 853.87 billion rubles), mainly due to growing investments. The amount of pension reserves invested in government securities rose 3%, to 181.85 billion rubles, owing largely to a positive revaluation of debt instruments on the back of cuts in the Bank of Russia key rate. The share of government securities in the savings portfolio reached 29.9% (a growth of 1.2 pp QoQ) and remained unchanged at 12.9% for the reserves portfolio.
In Q4, two NPFs engaged only in non-governmental pension provision surrendered their licences and left the market. Therefore, as of the end of the year, there are 47 NPFs operating in the market, 31 of which provide both mandatory pension insurance (MPI) and non-governmental pension coverage (NPC), two NPFs deal solely with MPI, and 14 NPFs only with NPC.