Investment Strategy is the basic document which defines the policy of investing the assets of the open ended voluntary pension fund NLB penzija plus managed by NLB Nov Penziski Fond AD Skopje.
The mission of the Company concerning the management of the assets of the fund is aimed at achieving an adequate long-term yield on assets of the fund primarily taking into account the essential role of the voluntary fully funded pension insurance, the rate of increase in the cost of living and other basic system parameters of pension insurance.
To achieve the mission in the long term, the Company sets the projected nominal annual yield of 5%. Given the actuarial projection for annual inflation over a defined time horizon of 1.86% (Assessment of Consumer Prices Index - icpi from July 2016), the projected annual real yield is 3.08%. The projected nominal and real yields are based on certain assumptions and expectations the validity of which is reviewed annually and may be changed in order to realize the mission in the long run..
Risk tolerance is defined by the possibility of assumption of investment risk which increases the likelihood of a negative yield in certain periods without jeopardizing thereby the achievement of the primary goal. Equally, tolerance to risk is also defined by the relationship or the willingness of our members and retired members to assume investment risks. Asumption of investment risk depends on the percentage of funds allocated from the fund in instruments with variable yield.
NLB Penzija Plus has an average / medium tolerance for risk.
Liquidity need is defined by the fund's liabilities to members. The assets of the fund should exhibit an adequate level of liquidity for the payment of pensions to members. Given the membership structure of the NLB Pension Plus at the moment, the fund needs to maintain liquid funds for payment of pensions to its members.
The investments of the fund should accomplish the goal within a specified time horizon corresponding to the time period up to the enjoyment of the right to pension of the member with an average age who is or will be included in the fund. The average age of members of the NLB Pension Plus at the time of designing this investment strategy is 40 years. The period up to enjoyment of the right to retirement benefits, or the investment horizon is more than ten years. Fund's assets are invested in accordance with the specified time horizon and entitlements to the funds prior to retirement.
The Fund is exempt from income tax on the investment of funds in the Republic of Macedonia. The yield from investment in foreign instruments, depending on tax regulations of the country in which investments are made, is taxable. The Company, when investing, takes into consideration the tax implications on investment yields. The Company in all cases where the conditions are met in accordance with bilateral agreements of the Republic of Macedonia for the avoidance of double taxation, reclaims the income tax paid.
The investments of the fund are governed by the Law on Voluntary Fully Funded Pension Insurance and the by-laws arising from that Act.