Prague - Czech commercial pension funds generated an estimated net profit of CZK 2.3 billion in the first nine months of 2008, down from CZK 3.45 billion in the same period last year, according to figures from the Czech Association of Pension Funds (APFČR).

The association says the drop in profitability, caused by unfavourable developments on the capital market, will have no impact on savers' accounts.

"Despite the current distrust in financial markets, pension funds have seen a growth in client numbers as well as total managed assets. They have been generating profits and appreciating their clients' savings," said Jiří Rusnok, head of APFČR.

He added that "Czech pension funds are in a very good condition despite the current financial crisis".

Over 60 percent of economically active Czechs are saving with pension funds. The total volume of client assets has been constantly increasing, from CZK 162 billion in late 2007 to CZK 167 billion in the first quarter of 2008, CZK 176 in the second quarter and an estimated CZK 181 billion in the third quarter.

On Monday, the cabinet approved a plan to amend the law on pension funds, which would allow the establishment of pension societies that would gradually replace today's pension funds.

Petr Nečas, labour and social affairs minister, says the amendment could take effect on January 2010, on the condition it receives an approval from the parliament and the president.