Romania To Introduce Ethical Codes In Pension Fund Management

05.17.2011 By Bostan Radu

Romania's Government will issue "ethical codes" applying to private pension fund management, in an effort to improve public confidence in fund administrators and ensure that contributors' money is handled transparently.

The codes will be developed by the National Pension House and implemented between 2011 and 2013, according to a government document.

The codes should ensure complete transparency regarding the operation of each pension fund and fair treatment for all contributors. They should uphold the contributors' rights, including the right to property, and set clear and reasonable compensation models, designed to act in the contributor's interest.

Romania's mandatory and voluntary private pension funds registered net profit of 448.1 million lei (EUR109 million) in 2010, up 61% on the year, according to data released by the Romanian Private Pension Association (APAPR).

The net assets of the mandatory private pension funds (Pillar II) and voluntary pension funds (Pillar III) hit RON5.24 billion in the first three months of the year, up 12.6% compared to the level reported in December 2010, said private pension regulator CSSPP.

The CSSPP said the number of contributors to the two segments increased by 1.8%, to 5.5 million, in the aforementioned interval.

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

CSSPP president Mircea Oancea said, in late-April, that the weight of shares in the total assets of Romania's private pension funds could increase to at least 25% in the next five years, from the current 15%, if the number of Bucharest Bourse (BVB) issuers rises and they diversify the fields in which they operate.

According to CSSPP data, the current asset structure of the country's private pension funds is conservative and lacks diversity, considering that fund administrators invested mainly in state bonds (66.99%), shares (15.08%), corporate bonds (9.08%), bank deposits (4.74%) and other types of bonds (3.07%).