Home / BUSINESS / Business environment requires the Gov’t not to change the Pension Pillar II. CNP: Contributions will not be suspended as of July 1
Business environment requires the Gov’t not to change the Pension Pillar II. CNP: Contributions will not be suspended as of July 1

Business environment requires the Gov’t not to change the Pension Pillar II. CNP: Contributions will not be suspended as of July 1

The business environment requires the Government not to change the Pension Pillar II. Several organizations, professional associations, market institutions, employers’ associations, financial analysts and financial product consumers sign a letter demanding for “keeping the architecture of the private pension system in Romania.”

”Predictability and legislative stability are crucial to the success of any long-term savings system designed to ensure the prosperity at the retirement moment of the over 7 million Romanians contributing to these funds,” the letter reads.

The signatories of the document mention that the solution of a three-pillar pension system implemented 10 years ago is a success story. High degree of regulation, transparency and special investment returns have received wide international recognition from institutions such as BetterFinance, EBRD or OECD. Thus, an analysis conducted by the OECD in 2017 places Romania’s Pension Pillar II on the 2nd place among the 38 states analyzed in terms of real yields (adjusted for inflation) in 2008-2016.

In 10 years, the private funds in Romania have achieved over RON 7 billion by investing RON 35 billion in administration, under the conditions of significant investment restrictions imposed by the legislation.

They also say that another major benefit of the existence of Pillar II of private pensions was “the significant development of local financial markets.” More than 90 percent of Pillar II pension fund assets are invested in Romania.

Association of Independent Administrators (AAI), Association of Financial-Banking Analysts in Romania (AAFBR), Romanian Associations of Banks (ARB), Businessmen’s Association of Romania (AOAR), AmCham Romania, CFA Romania, Bucharest Stock Exchange (BVB), Romanian Business Leaders (RBL), Foreign Investors Council (FIC) were among the signatories of the document.

On the other hand, Romanian Business Leaders (RBL) shows separately in a press release that 7 million Romanians will have almost 13 pc less money on their accounts due to failure with the Pillar II schedule. The organization asks the authorities to keep their word and not to weaken the entire economy and the country’s ability to protect itself against external imbalances.

RBL points out that the Romanian authorities did not respect the word to increase the contribution for the Pension Pillar II to 6 percent by 2016 and even act contrary – from 2018, the contribution was cut from 5.1 percent to 3.75 percent.

In turn, Ion Ghizdeanu, president of National Commission for Economic Forecasting (CNP) on Monday assured that the contributions to Pension Pillar II will not be suspended from July 1, hotnews.ro informs.

According to him, the information related to the suspension of payments to Pension Pillar II was only discussion scenarios, published by mistake. The institution he represents has not formally submitted any proposal on this subject. However, when asked if CNP continues the analysis on the subject, he initially responded negatively, then Ghizdeanu added that the assessment will continue.

Moreover, CNP official could not explain why it’s needed to make changes to the Pension Pillar II, as the PSD-ALDE government wants to do.

Asked what the benefits of suspending private pension contributions would be, although it is “a performing system,” he replied: “Excuse me, but I can not tell you!”, digi24.ro shows.

 

Read also about the hidden issues of 2018 legislative programme of the Government regarding Pension Pillar II

 

About Anca Bernovici