With an unemployment rate of 21% and a savings level of just 13.2% of disposable income, saving is hard when you are concerned about tomorrow. In this context, pension plans, which have until now been the preferred vehicles for managing savings funds, are in bad shape.
According to data from Inverco, from January to September of this year they have registered net contributions of 2.681 billion euros, a 8% drop compared to the same period of last year and the lowest figure recorded over the past nine years (this data has only been collected since 2003). And there is more bad news. The drop in contributions has been accompanied by an increase in withdrawals (3.142 billion euros), which means that net contributions are in the red.
Many reasons to flee
The effects resulting from the ongoing crisis in Spanish savings banks is only one of the reasons that help to explain the strong fall in pension plan performance. Not only have these funds seen net drops in contributions, but net asset values (a figure that includes contributions and revaluation of portfolios) have also dropped by 3.84%, down to 81.55 billion euros.
"Lack of confidence in the markets is having a huge influence on low performance of pension plans, both the total equity value and fixed returns. Investors are increasingly risk averse and are looking for products that guarantee a low-level minimum return," affirmed José Ramón Morso, director of investments at Mercer.
