Social Security. War and interest rates reduce supplemental pensions

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Having just emerged from the shadow of the pandemic, the nervousness of the market at the beginning of 2022 is inevitably also reflected in the valuations of the pension funds chosen by about 8.8 million Italians, which managed more than 212 billion euros at the end of December. The script of 2020 has already appeared, when the pandemic led to a similarly negative first quarter, especially for equity investments, which ended with a loss of 5.2% for occupational pension funds, a drop of 7.5% for open funds, and a land of 12.1% for the third-level PIP (unit link) in just three months.

Even in the first quarter of the pandemic, the only survivors were the separately managed PIP programs, which remained operational because assets were valued at historical cost rather than market value. It should be remembered that these sharp declines were largely recovered by the end of the year, thanks to the effectiveness of the vaccines and the subsequent continued recovery of the markets.

fear

Back to today, concerns are coming from multiple sources: war, inflation, the return of Covid-19 in China, and last but not least, the assumption that the central bank will raise official interest rates. In short, it is hard to think that it is possible to find a vaccine or broad-spectrum antibiotic to stop all the “infections” currently affecting stocks and bonds.

2022 Results

But let’s look at the results for the first half of 2022. According to a preliminary analysis drawn up in collaboration with the Consultique research office, this time all pension fund projects (both open and consultative) saw a decline in their first year shares are falling in the first quarter, with quarterly results ranging from -1.4% of guaranteed amounts for occupational funds to -5% of equity amounts for open pension funds.

The pure bond and hybrid “open” bond sectors were also affected by the rise in yields, with a negative balance of 2.8%, which fell to -3% for those investors who focus on bond trading. In this case, no one was saved: neither open funds nor contract funds. All analysis lines ended with negative results. In line with the market performance during the same period: the MSCI World Equity Index and the main bond index both fell by about 5% in the first quarter.