Pension funds to invest in eurozone
Greece’s conservative government yesterday submitted to Parliament a bill allowing pension funds to invest up to 23 percent of their assets in the eurozone for the first time. Drafted in response to a bond scandal that has rocked Greece for months, the bill also limits funds to invest only 2 percent of their assets in derivatives such as structured Greek bonds. «This bill secures pensioners’ interests in the best possible way,» Labor Minister Vassilis Magginas told reporters. «It is harmonized with European practice but also adjusted to Greek reality.» A Greek prosecutor is investigating claims by ministers and the press that a civil servants’ pension fund paid too much for a Greek government structured bond, in an affair that led to the sacking of Magginas’s predecessor. About 80 main funds, managing about 30 billion euros, will be allowed to invest up to 23 percent of their assets in stocks, equity derivatives, real estate and mutual funds, not only in Greece but in the rest of the eurozone for the first time. On top of this, they will be allowed to invest an additional 2 percent of their assets in Greek structured bonds. «The bill allows pension funds more investment flexibility as they can now invest outside the limited Greek market, and this is positive,» said Vassilis Antoniadis, investment manager at Marfin Asset Management. Funds will have up to five years to adjust their portfolios to the new rules, as many were already over the 23 percent limit in higher risk investments, says the bill, which comes into effect after a Parliament vote expected by the end of summer. The rest of their assets can be invested in classic, coupon-bearing bonds or repos, while 1 percent can be invested in time deposits with commercial banks. The law allows funds to set up their own investment management companies, to better pool their assets and resources. It creates two committees – one to advise funds on investment decisions and another on compliance. «If these committees do their job well, all these changes will have positive results, maybe not immediately, as there will be a grace period to let funds prepare,» Antoniadis said. Greek prosecutors are investigating whether the civil servants’ auxiliary pension fund paid too much for a bond in the affair that has so far prompted the suspension of two Greek brokerages. (Reuters)
