The aim of the investment making in the pension funds is an effort for as high yield as possible at a minimum risk. Therefore the state claims every pension fund to invest in several tens or hundreds of securities in various companies and countries. In case that a value of any paper security decreases, it will not influence the value of the entire fund more significantly.
A standard investment risk is connected with money investment making. It means that a yield in a pension fund may be high or low and the value of fund may vary - to grow, to decrease or to stagnate.
A yield in a pension fund is very important, because the higher yield, the higher pension from the 2nd pillar you may expect and vice versa. The investment making in the pension funds is governed by a rule “the highest possible yield at the minimum risk”. Therefore, the state has introduced the strict rules, so called investment limits for the investment making in the pension funds, by which a possible risk from the investment making is reduced.
In addition, the state requires every pension fund to invest into several tens or hundreds of securities in various companies and countries. In case a value of any paper security decreases, it will not influence the value of the entire fund more significantly.
The investment limits establish that the pension funds may invest only into site, liquid and in-public marketable securities assessed by renowned rating agencies. The observance of the investment limits set by the law is supervised by the depository and especially by the National Bank of Slovakia.
The state has introduced a mechanism at an investment making in the pensions funds, which ensures that a yield of any pension fund may not fall significantly behind the average yield of the pension funds of the same type in Slovakia, so called benchmarking – the requested rate of return.
It means that if two savers have money in the balanced fund, but one in the PFMC A and the other in the PFMC B, a difference of the yields achieved in both of pension funds may not be higher than a difference permitted by the law. If it is the case, the PFMC, which did not valorize money of savers sufficiently, shall be obliged to add to the pension fund such amount so that the yield of this fund to achieve at least a limit set by the law.
The investment strategy is described in a statute of a pension fund and information leaflet of the pension fund, which PFMC had to attach to your agreement of OAPS. The statutes of the funds are published on the web-sites of the PFMC and at sales offices of the particular PFMCs.
A standard investment risk is always connected with saving and investment making in pension funds. The risk presents a rate of a possible change of the fund. The higher investment risk usually means a possibility of higher valorization, but also a danger of a decrease of the fund value. From the point of view of the investment risk, the safest funds are the conservative pension ones, at which the lowest yield is expected from the long-term point of view. On the contrary, the growth pension funds have high investment risk but from the long-term point of view they have an assumption of the highest yield.