€71 mln return on investment for 2013

Kosovo Pension Savings Trust (KPST), during 2013 continued with positive return on investments. The Governing Board and the Management, within their activities steadily took care of: the interests of contributors, diversification of pension assets and returns from investments, which, after all, are principles established by the law. The Governing Board believes that it has taken the right, responsible and professional decisions, and is committed to reporting, communication and liaison and cooperation with institutions, contributors, media and the public, in order to ensure efficiency and transparency.

During 2013 regular reports were submitted to the Assembly, Government and the Central Bank of Kosovo. Also, close cooperation continued with the Tax Administration of Kosovo, as well as regular communication continued with the International Monetary Fund and the World Bank. The Governing Board is pleased that the Assembly of Kosovo adopted without any objections the Annual Report of 2012, which also includes the report of the external auditor, who gave an unqualified opinion on the financial statements of KPST.

Concerning the ​​investments, it can be said that KPST had a successful year. 2013 ended with a gross return on investments of about 71 million EUR, or a net increase of 8.5% of the share price. In nominal value this is the best result in the field of investments that KPST has ever achieved. Only for the last two years, 2012 and 2013, the gross return on KPST investments is around 125 million EUR.

On the other hand, pension contributions during 2013 amounted to about 119 million EUR, which was about 6 million EUR more than the accumulated contributions in 2012.

As a result: 71.1 million EUR from investments and 119.1 million EUR from contributions were added to assets under management for 2013; meanwhile, 10.7 million EUR were deducted because of pension payments; 1.5 million EUR for refunds of erroneous payments, and 4.6 million EUR for financing of investment and operational costs of KPST. All these resulted in an increase of assets under management for 173.4 million EUR, hence reaching 913.1 million EUR at the end of 2013.

Although the Governing Board for 2013 continued to have a relatively conservative strategy in the field of investments, the outcome of return on investments – 8.5% – was quite satisfactory; more so when the annual index of consumer prices (inflation) in Kosovo had an increase of only 0.55% during 2013, a goal which through investments is targeted to be achieved and exceeded by the Board. Much of the return on investments was achieved from share markets in developed markets, which had about 35% of the investment portfolio. While smaller, but positive contribution, was yielded by investments in: absolute return instruments, credit market and Kosovo Government securities and bank deposits in Kosovo.

·         Disbursal of Pensions

During 2013 there were 3,567 new accounts for fund withdrawal, while the value of assets that were withdrawn during the whole year reached 10.7 million EUR. The total number of withdrawal accounts, since the establishment, went to 20,503, while the total of withdrawn amount was near to 39 million EUR.

·         Contributors’ Accounts

The number of contributors who have accounts in KPST reached 447,259 from 418,064 from a year ago. While the number of active contributors during 2013, that is for those who made the payment of pension contributions during the year is 277,305; this is an increase of 4.2% compared to 266,026 persons in 2012.

·         Investments in Kosovo

At the end of 2013 KPST has had a total of 53 million EUR invested only in Securities of the Government of Republic of Kosovo. A year earlier investments in Kosovo were 46 million EUR, but of these only 14 million EUR were in the Securities, and the rest was bank deposits. Investments in Securities for 2013 were used to the fullest extent permitted by the law.

·         Operations

During 2013 Pension Savings Trust continued to have an increase in all areas of customer relations: printing account statements, correcting addresses, online account activation, retirement applications, answering questions via email and webmail and eTrusti service. In total, the number of individual clients served by KPST during 2013 has exceeded the number of 67 thousands, which was an increase of 60% compared to the services offered a year ago, when 42 thousand services were offered. Whereas the number of statements to be submitted to contributors for 2013 increased by approximately 55 thousands, from 358 thousand that were a year ago.

Despite this, KPST has asked for reduction of the management fee, which is for operating expenses, for 2014, from 0.15% to 0.13%, a request which was approved by the Assembly of Kosovo.

·         Key Facts

The table below presents summarized key facts for the last two years. Final data for 2013 will be presented in the Annual Report of 2013, after auditing the financial statements by professional external auditor.

Facts	On December 31, 2013	On December 31, 2012
Annual gross return on investments	€71.1 million	€54.2 million
Assets under management	€913.2 million	€739.8 million
The share price	€1.2117	€1.1170
Net investment performance	8.5%	8.0%
Contributions collected during the year	€119.1 million	€113.0 million
Pensions disbursal during the year	€10.7 million	€8.7 million
Retirees during the year	3,567	3,264
Contributors’ Accounts	447,259	418,064
2013 contributors (active)	277,305	266,026
Investments in Kosovo at the end of the year	€53.1 million	€46.5 million
Clients served	67,786	42,189
Management fees	0.53%	0.60%
Account Statements sent to contributors	412 thousand	338 thousand
Pensions disbursed since inception (of the KPST)	€38.9 million	€28.2 million
Pension beneficiaries since inception (of the KPST)	20,503	16,936