Brigitte Miksa: The CEE countries are facing demographic problems similar to those in the West. Birth rates there are currently 1.24 to 1.42 children per woman – far too low to sustain today’s level. Theoretically you would need 2.1 children per woman.

According to projections, the population of the eleven countries in the study will shrink by 15 percent – that's 16 million people – by 2050. At the same time, the proportion of seniors will rise to 50 percent by 2050. At that point there will be only two working people to fund each retiree.

Miksa: No, there are significant differences. Bulgaria will lose a third of its population by 2050, Romania 20 percent, and Poland 10 percent.

Miksa: Very constructively. Eight of the eleven countries we studied now have introduced a fully-funded second pillar of support, in the form of individual pension plans, to put retirement income on a broader base and also to evolve their capital markets further. At the same time, that takes some of the pressure off the state systems. Also, it puts them far ahead of many Western European countries in terms of diversifying retirement income.

Miksa: There’s no catch. But voluntary savings for private retirement coverage are still underdeveloped. We can hope that will change as prosperity in the region continues to rise.

People are also rather averse to risk in this part of Europe. So there’s a good deal of educational work to do in that regard. Until now, people have preferred to place their money in conventional types of investment, like real estate or savings accounts. In many cases, it was not possible to own stock until the privatization process began in the late nineties.

Miksa: We project that retirement markets in the CEE countries will grow by 19 percent a year to 2015. That’s equivalent to an increase in volume from 51 billion to 245 billion euros. Eighty percent of the volume projected for 2015 will come from the three Visegrád countries alone – Hungary, Poland and the Czech Republic – even though they have only 55 percent of the population.


Allianz Global Investors' report on Central and Eastern European retirement provision systems is the second in a series. The first came out in 2004. The study covers Bulgaria, Estonia, Croatia, Latvia, Lithuania, Poland, Romania, the Slovak Republic, Slovenia, the Czech Republic and Hungary. The Czech Republic, Lithuania and Slovenia are the only countries that have not introduced a mandatory fully-funded second pillar for their pension systems, and have alternative forms of retirement coverage instead.

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