Negritoiu (ASF): The pension funds in Romania can’t be nationalized

Misu Negritoiu, the head of the Financial Supervision Authority (ASF), said that any attempt to nationalize the pension funds in Romania breaches the Constitution.

His reaction came days after the ASF slapped a RON 750,000 fine on NN Pensii and withdrew the license of its CEO, Raluca Tintoiu, who also received a RON 100,000 fine.

Negriotiu explained that the second pension pillar receives contributions from the state in the name of the Romanian beneficiaries. Once these funds are transferred in this pillar they become assets in private property that can’t be withdrawn or nationalized, according to the Constitution.

The ASF head added that the funds in the third pension pillar, in which the contributions of Romanians are optional, are fully private and are comparable to investment funds in the capital markets.

The Parliament, respectively the Government, have the right to increase or decrease the future budgetary allocations, without impacting in any way the contributions from the past. And they can eventually change through law the private management into state management, but this doesn’t mean “nationalization”, according to Negritoiu.

At the end of last year, the second pension pillar had funds worth EUR 7 billion, out of which 65 percent was invested in sovereign bonds.

Referring to the case of NN Pensii, which submitted a notification letter to its clients about the potential risk of the nationalization of the second pension pillar, Negritoiu said that the pension manager was in an “obvious conflict of interest” because the political objective of the government is challenged by the economic one of private companies.

“It is unfortunately what NN Pensii did, with potential unwanted effects, which could dent the confidence in the stability of the funds and the market,” said Negritoiu, according to Agerpres.

The head of the Social Democratic Party (PSD), Liviu Dragnea, has accused Negritoiu of initiating the rumors regarding the nationalization of the second pension pillar. The president of the ASF said that such an accusation is “subjective and contradictory.”