“What worries us is that, following the merger of former supervisory authorities of the private pension system, capital market and insurance under the umbrella of the Financial Supervisory Authority (ASF), private pensions are affected by lower credibility for reasons that have nothing to do with this system. It’s a contagion from the insurance market and the capital market, which are facing various problems,” said Giurescu.
He added private pensions represent a stable factor on the non-bank financial market and have not caused any scandal or damages to participants in the past eight years.
“On the contrary, the private pension system has had very good results: yields of over 10%, which are good in a not very developed national economy,” said Giurescu
He said private pensions constitute the main saving tool countrywide and estimated around 1 million people will have saved more in their pension funds by the end of the year than through bank deposits.
“Private pensions have major contributions in financing the country’s internal public debt. When the system was introduced, pension funds invested all their contributors’ money in state paper. These investments currently account for 60-65% of total pension fund assets, as several state companies have been listed on the stock market. Private pension funds have practically invested RON2.5 billion in these stock market listings in the past 12 months,” he said.
Romania introduced the voluntary private pension segment (Pillar III) in May 2007 and the mandatory segment (Pillar II) a year later. The overall private pension system has assets of EUR4.3 billion.