Romania’s compulsory private pensions assets hit EUR 10.4 billion just before the most challenging year for this market

Sorin Melenciuc 07/01/2019 | 16:21

Romania’s mandatory private pensions (or Pillar II) funds had assets of RON 48.2 billion (EUR 10.4 billion) under administration at the end of November, up by 2.4 percent compared with October, and almost two thirds of the amount are invested in government bonds, according to Romania’s financial markets regulator (ASF).

Almost 63 percent of total amount is invested in government securities, while 19.35 percent is placed in shares and 7.8 percent in bank accounts, according to official data.

These fresh numbers come after an important government decision that threatens the future of private pensions in Romania.

At the end of December, the government has adopted an emergency ordinance that introduced major changes in mandatory private pensions (Pilar II) scheme.

The government slammed pension funds’ fees and forces private funds managers to increase their capital in order to continue their activity in Romania.

At this moment, seven fund managers are active on the Pilar II market in Romania.

At the end of 2017, the government cut the contribution to Pillar II to 3.75 percent of gross wages in 2018, from 5.1 percent last year, justifying the decision by the increase of gross earnings by 25 percent after the transfer of social contributions from employers to employees.

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