Inflation and Defined Contribution Pension Schemes in Central and Eastern European (CEE) Countries
Inflation and Defined Contribution Pension Schemes in Central and Eastern European (CEE) Countries

Author(s): Jeko Milev
Subject(s): Politics / Political Sciences, Politics, Economy, Business Economy / Management, Public Law, Welfare systems, Public Finances
Published by: Университет за национално и световно стопанство (УНСС)
Keywords: pension funds; CEE countries; investment results; inflation; risks
Summary/Abstract: Pension systems in most of the CEE countries were significantly reformed at the beginning of 21st century. The introduction of fully funded components in addition to the traditional pay-as-you-go ones marked the beginning of a completely new age in the development of the pension systems in the region. The basic goal of the current paper is to research the investment performance of the defined contribution pension schemes in several CEE countries – Estonia, Slovakia, Romania and Bulgaria. The thesis defended throughout the article is that conservative types of investment portfolios for long term investors such as pension funds are not appropriate especially under scenario of significant inflation rate. The results of the research show that those countries where pension fund managers were allowed to structure portfolios with different risk profile have much higher chance to protect the savings of insured individuals in real terms in prolong period.

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