CZECH REPUBLIC - AEGON pension fund has set a rate of return of 4.5% for 2007 - more than two percentage points higher than the largest Czech pension fund Ceske Pojistovny (PFČP).

The fund, which was established in June 2007, agreed the return rate at its annual general meeting after it attracted more than 30,000 clients and more than CZK 230m (€9.5m) assets under management in its first year of existence.

Czech pension funds have to guarantee a certain return rate from their own capital which is set annually at the general meeting, however Aegon is currently the highest rate, above the 2.4% agreed by PFČP and the 3.07% set by Ceske Sporitelny (PFCS). (See earlier IPE articles: Czech fund improves performance and 2007 returns fall to 2.4% for PFČP)

AEGON has also revealed it will give two extra bonuses to members who meet certain criteria, including an additional 2% bonus for clients with assets reaching 1.5 times the average monthly salary - around CZK 32,500 - in the first year, and a loyalty bonus for members that stay with the pension fund for more than five years.

That said, despite the high return rate and the additional bonuses, AEGON confirmed that the company generated a loss of CZK18.5m in 2007 following higher initial investments for establishing the fund, although it claimed the loss was funded by shareholders.

AEGON revealed 70% of its clients are new participants in the pension system, and figures from the end of December show membership increased by almost 20,000 in the first half of 2008, while assets under management rose from CZK 39.7m to more than CZK 230m, suggesting the fund is continuing to fill a 'gap' in the market. (See earlier IPE article: AEGON picks up 'gap' Czech pensions business)

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