Private Pension Guarantee Fund Might Be Running By End-Year

04.27.2011 ZF English

Romania's private pension system guarantee fund might become operational by the end of the year, if the Chamber of Deputies adopts the relevant bill during the current parliamentary session, said Mircea Oancea, president of private pension regulator CSSPP.

Romania's private pension system guarantee fund might become operational by the end of the year, if the Chamber of Deputies adopts the relevant bill during the current parliamentary session, said Mircea Oancea, president of private pension regulator CSSPP.

"The bill has been endorsed by the committee for labor and is currently being debated by the Chamber's committee for budget and finance. If it is adopted by June 30, the end of the current parliamentary session, the guarantee fund will be operational by the end of the year," said Oancea in a seminar on Wednesday.

According to the bill, the fund will compensate the losses incurred by private pension contributors and/or beneficiaries, both during the period of contribution and after they earn the right to a pension. Compensation will only be paid if private pension fund administrators and private pension providers fail to meet their financial obligations and pay the amounts set by the private pension regulator.

The guarantee fund will be made up of the contributions of companies licensed on the private pension market, which will be obliged to pay a contribution of 0.3% of the net assets managed, during the fund's first year of activity on the market, and a contribution of 0.35% starting with the second year.

In addition to the annual contribution, private pension fund administrators and private pension providers will also pay an initial contribution equal to 1% of the subscribed and transferred share capital in accordance with by-laws, but no less than the equivalent in lei of EUR50,000.

The net assets of Romania's mandatory private pension funds (Pillar II) and voluntary pension funds (Pillar III) hit 5.24 billion lei (EUR1.285 billion) in the first quarter of the year, up 12.6% compared to the level reported in December 2010, said private pension regulator CSSPP.

Mandatory private pension funds reported net assets of RON4.88 billion in the January-March interval, up 12.8% compared to the end of last year. In March, mandatory pension funds' net assets increased by 4.3% compared to the previous month.

Voluntary pension funds' net assets in the first three months of 2011 totaled RON363.4 million, up 10.8% compared to December 2010. Compared to February, voluntary pension funds' net assets increased by 3.8%.

(EUR1=RON4.0767)