Prague - Pension company Raiffeisen penzijni spolecnost will end activities on the Czech market for private pension schemes due to the government's approach to the pension reform, Raiffeisen said in a press release today.
Raiffeisen has about 13,000 clients in the second and third pillar of the pension system who will be taken over by pension company Penzijni spolecnost Ceske pojistovny (PSCP).
The value of the transaction has not been disclosed.
The transaction should be completed at the beginning of the second half of 2014 after all regulatory conditions are met.
Raiffeisen is sending letters to clients with information about their transfer to PSCP.
"The current political situation is not favourable for the further development of the so-called second pillar," Raiffeisen said in the letter to clients.
"For Raiffeisen penzijni spolecnost as a new entity on the market, the situation is even more adverse and this significantly complicates our possibilities of effective management and appreciation of your deposits in the long term," Raiffeisen said.
The new government has said in its coalition agreement it wants to abolish the reform of the pension system, introduced by the previous cabinet, including savings in the so-called second pillar of the system.
According to the government's plans, the second pillar is to merge with the third pillar.
Within the pension reform, launched in January 2013, Czechs can transfer 3 percentage points from the pay-as-you-go pension system to the second pillar if they add 2 percentage points from their own income.
Raiffeisen penzijni spolecnost started to offer pension schemes when the reform started in January last year.
Almost 82,000 people had registered in the second pillar of the pension system by the end of December 2013.
Originally, pension companies expected that about half a million people would register in the second pillar in the first six months of its operation.