Plan to merge assets of pension funds


Darwish bin Ismail Al Balushi, minister responsible for financial affairs, has said that although the government planned the merger sometime back, it got delayed due to crisis in the financial market. – Times file photo

Muscat: Oman government is planning to merge the assets of pension funds in an apparent move to save cost and enhance efficiency, when investing the corpus funds in stock markets.

However, the pension obligations or systems of separate pension funds will remain without any change.
"We have gone a long way in this respect. However, there are some matters that require alternate arrangements," said Darwish bin Ismail Al Balushi, minister responsible for financial affairs.

Oman has as many as ten pension funds, which include major players like the Public Authority for Social Insurance (Paci), Royal Oman Police Pension Fund, Ministry of Civil Service Pension Fund, Royal Guard of Oman Pension Fund, Internal Security Services Pension Fund and Diwan of Royal Court Employees Pension Fund.

The minister, while addressing the media to announce the state budget last week, said that although the government planned the merger sometime back, it got delayed due to the crisis in the financial market.

"All these crises had an impact on investors in entering the capital market. A decision was taken to wait until a clear picture emerges."

The proposal is under study and a collective management will increase efficiency and result in better returns on investment.

Market sources said that with the merger of pension funds, the size of the corpus fund becomes big.

"With the merger, there will be better cost savings and synergies. The pension funds will be able to plan their strategies in a bigger level. Now, different pension funds have varying strategies in deploying funds in the market," said a market analyst.

It is roughly estimated that 20 per cent of the market capitalisation of listed companies on the Muscat Securities Market (MSM) are with pension funds. With the growth in number of employees in the public sector, the size of the pension funds are also growing in leaps and bounds. 

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