Leaders in Occupational Pension Plans

Interview Constantinos Sophocleous, CFA EuroLife Fund Manager 

For 30 years now, EuroLife has been offering reliable insurance and retirement solutions to its customers, both at the individual and corporate level. Always keeping its customers at the center of everything is does, EuroLife is today one of the most robust and creditworthy companies in Cyprus and a sector leader with more than 100.000 customers.

In its 30 years of existence, EuroLife has paid over €1 billion in redemptions, benefits, and claims, while offering over €8,5 billion in life insurance coverage. EuroLife has a well-trained network of advisors aiming to provide quality customer service.

EuroLife Occupation Pensions Plan

The EuroLife Occupational Pensions Plan is equivalent to a Provident Fund in terms of tax treatment and protection, but with additional benefits, such as flexibility for employers and employees, which allows them to tailor the Plan according to their own needs. Each employee maintains their own Pension Account and can manage their investment choice without need for a management committee or a single investment policy.

EuroLife offers flexible investment solutions for Plan members through Funds of different investment profiles.

EuroLife has also created an approach that is new to Cyprus: “Hands on” and “Hands Off”. “Hands on” gives members the option of selecting a fund by themselves, while “Hands Off” is an automated investment fund selection system.

Number of customers and investment funds

EuroLife manages client investment funds in excess of €430 million and serves more than 300 corporate clients.

The company offers four pension funds, each with a different investment profile. The Conservative Fund carries the lowest investment risk, and is followed by the Income Fund, the Balanced Fund and the Growth Fund.

EuroLife’s successful investment philosophy is based on:

1. The wide diversification of investments.
2. Maintaining significant investment liquidity.
3. Very rigorous investment processes.
4. A strong risk management culture that has stood the test of time and performed well during past investment events.

Performance

The company’s Balanced fund has a history of 30 years with an average annual return of 5,8%. The Growth, Income and Conservative Funds have a history of 17 years. EuroLife’s pension funds were created in 2016 after the relevant legislation was passed and have the same investment policies as the company’s insurance funds.

Since 2016, the Balanced pension fund has averaged a return of 5,5% per annum. The Income pension fund has averaged 2,4% per annum while the Growth pension fund has averaged 8,1% per annum.

Market data today

The number of Provident Funds in Cyprus is undoubtedly too high for the size of the economy. Most companies in Cyprus, regardless of size, maintain their own provident fund, resulting in the existence of many small funds.

Given the sizes of provident funds in Cyprus, the ability to implement a sound investment policy is very limited and costs are high. The integration of such funds into the EuroLife Occupational Pensions Plan creates greater economies of scale and efficiency, thereby allowing better investment management, better service and lower costs.

The sector’s future

Following increased supervisory requirements on provident funds, it is natural to witness an increasing demand for retirement solutions that are both well-managed and well-governed. We expect that large provident funds will be able to meet these requirements, while small and medium sized funds will choose other, more effective solutions.

By choosing EuroLife, governance and management responsibility are entrusted to industry experts with long-term expertise, experience, specialization and professionalism. We have a proven, successful investment strategy record and partnerships with internationally renowned asset management firms.