TALLINN — A research analysis by Estonia’s Ministry of Finance has concluded that banks should be allowed to change the pension funds quarterly instead of once a year.

The analysis, which was prepared in the last few months of 2009 to evaluate how the financial crisis affects the funded pension system, suggests that pension funds should be changed more than once a year to react better to changing market conditions. The analysis was completed after the Swedbank pension fund scandal in the fall when the bank invested the money of pension fund shareholders into the junk bond fund PDF. The bank then had to refund the losses out of [private_supervisor]its own wallet.

Märt Ots, general director of Estonian Competition Authority told the Postimees newspaper that the restriction on switching pension fund accounts to once a year does currently not in favor of shareholders.

“The rare changing option violates the interests of share holders, and does not let the new pension fund managers to operate,” said Ots.

Siiri Tõniste, head of insurance politics department in the Ministry of Finance said that the ministry has in talks with the mandatory funded pension managers throughout January and February this year about the potential reform.

“The analysis shall be a base for more detailed discussions on possible changes and then the changes will be assembled into the draft act which is planned to be presented to the government in 2010,” Tõniste told Baltic Reports.

Tõniste said that since the content of the document is not ready to be presented yet, she will not give more comments concerning the issue.

Too costly for feasibility?

Agnes Makk, head of Swedbank investment funds, said that while freedom of choice is important, investing in pension funds is a long-term investment unlike the buy/sell rapidity of stock exchange investments. Changing a pension fund frequently will accrue expensive charges, which would eventually be paid by the client.

“The frequent change of pension funds might even cause a loss for the client, for example when someone will change the fund after every market fluctuation,” Makk told Baltic Reports,”It must be remembered that additional costs come along with changing the fund.”[/private_supervisor] [private_subscription 1 month]its own wallet.

Märt Ots, general director of Estonian Competition Authority told the Postimees newspaper that the restriction on switching pension fund accounts to once a year does currently not in favor of shareholders.

“The rare changing option violates the interests of share holders, and does not let the new pension fund managers to operate,” said Ots.

Siiri Tõniste, head of insurance politics department in the Ministry of Finance said that the ministry has in talks with the mandatory funded pension managers throughout January and February this year about the potential reform.

“The analysis shall be a base for more detailed discussions on possible changes and then the changes will be assembled into the draft act which is planned to be presented to the government in 2010,” Tõniste told Baltic Reports.

Tõniste said that since the content of the document is not ready to be presented yet, she will not give more comments concerning the issue.

Too costly for feasibility?

Agnes Makk, head of Swedbank investment funds, said that while freedom of choice is important, investing in pension funds is a long-term investment unlike the buy/sell rapidity of stock exchange investments. Changing a pension fund frequently will accrue expensive charges, which would eventually be paid by the client.

“The frequent change of pension funds might even cause a loss for the client, for example when someone will change the fund after every market fluctuation,” Makk told Baltic Reports,”It must be remembered that additional costs come along with changing the fund.”[/private_subscription 1 month] [private_subscription 4 months]its own wallet.

Märt Ots, general director of Estonian Competition Authority told the Postimees newspaper that the restriction on switching pension fund accounts to once a year does currently not in favor of shareholders.

“The rare changing option violates the interests of share holders, and does not let the new pension fund managers to operate,” said Ots.

Siiri Tõniste, head of insurance politics department in the Ministry of Finance said that the ministry has in talks with the mandatory funded pension managers throughout January and February this year about the potential reform.

“The analysis shall be a base for more detailed discussions on possible changes and then the changes will be assembled into the draft act which is planned to be presented to the government in 2010,” Tõniste told Baltic Reports.

Tõniste said that since the content of the document is not ready to be presented yet, she will not give more comments concerning the issue.

Too costly for feasibility?

Agnes Makk, head of Swedbank investment funds, said that while freedom of choice is important, investing in pension funds is a long-term investment unlike the buy/sell rapidity of stock exchange investments. Changing a pension fund frequently will accrue expensive charges, which would eventually be paid by the client.

“The frequent change of pension funds might even cause a loss for the client, for example when someone will change the fund after every market fluctuation,” Makk told Baltic Reports,”It must be remembered that additional costs come along with changing the fund.”[/private_subscription 4 months] [private_subscription 1 year]its own wallet.

Märt Ots, general director of Estonian Competition Authority told the Postimees newspaper that the restriction on switching pension fund accounts to once a year does currently not in favor of shareholders.

“The rare changing option violates the interests of share holders, and does not let the new pension fund managers to operate,” said Ots.

Siiri Tõniste, head of insurance politics department in the Ministry of Finance said that the ministry has in talks with the mandatory funded pension managers throughout January and February this year about the potential reform.

“The analysis shall be a base for more detailed discussions on possible changes and then the changes will be assembled into the draft act which is planned to be presented to the government in 2010,” Tõniste told Baltic Reports.

Tõniste said that since the content of the document is not ready to be presented yet, she will not give more comments concerning the issue.

Too costly for feasibility?

Agnes Makk, head of Swedbank investment funds, said that while freedom of choice is important, investing in pension funds is a long-term investment unlike the buy/sell rapidity of stock exchange investments. Changing a pension fund frequently will accrue expensive charges, which would eventually be paid by the client.

“The frequent change of pension funds might even cause a loss for the client, for example when someone will change the fund after every market fluctuation,” Makk told Baltic Reports,”It must be remembered that additional costs come along with changing the fund.”[/private_subscription 1 year]

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