Investment policy

Investment policy

MANDATORY FUND

KB First Pension Company AD Skopje invests the assets of the members of the Mandatory Fund it manages in accordance with strict rules and principles, under the continuous supervision of the Agency for Supervision of Fully Funded Pension Insurance, while the Custodian Bank keeps the Pension Fund’s assets separate from the Company’s assets.

Pension Fund assets are invested in order to ensure the safety of assets, diversification of investment risks and to maintain adequate liquidity levels. The Company shall focus its efforts on achieving a long-term (about 30 years’) nominal rate of return of at least 2 percentage points above the inflation rate (CPI) for the same period, i.e. achieving a real rate of return of at least 2%.

The process of asset allocation and risk budgeting takes into account the long-term nature of liabilities and the age structure of Fund members.

The management of Fund’s assets shall be done through a balanced portfolio consisting of: investments in both variable yield instruments and fixed-income instruments.

The purpose of investment in shares is to maximize the long-term real growth of assets, while investments in fixed-income instruments are expected to generate stable income and ensure portfolio protection.

Investments abroad shall be made in investment funds, mainly in index funds. By investing in the largest and most diversified international index funds, passive exposure to foreign capital markets is achieved, as well as investment costs control. The MSCI ACWI Index shall be taken as a benchmark for the regional portfolio structure of foreign shares.

Portfolio

ИЗВЕШТАЈ ЗА ИНВЕСТИЦИОНО ПОРТФОЛИО НА КБ ПРВ ОТВОРЕН ЗАДОЛЖИТЕЛЕН ПЕНЗИСКИ ФОНД ЗА 2023 ГОДИНА (ДЕТАЛНИ ИНФОРМАЦИИ)

Risk management

The management of Funds of KB First Pension Company AD Skopje is based on the principle of fiduciary duty, and in that process, particular attention is given to risk management procedures.

Risk can be defined as a combination of an event likely to occur and the impact it may cause. Risk management is a process of identifying, measuring, managing and controlling risks. This process should result with benefits at all strategic levels.

Risk management procedures are based on the concept of Enterprise Risk Management (ERM). This concept provides a risk management framework consisting of:

• Identification of individual events as risks;
• Measurement of risks through probabilities and impacts of individual events;
• Risk management;
• Risk control.

Identified risks being managed are grouped into the following groups: Financial Risks, Pension Risks, Operational Risks and External Risks.

In the course of its operation, KB First Pension Company faces many risks, some of which are significant challenges. A proactive approach to the risk management process results in benefits for all participants in the system, including members, owners, employees and the regulator.