The system is based upon the principle that the “sustainability of a pension system depends on the principle of contributiveness and individual responsibility,” as per the new program.
The program stipulates the introduction of a voluntary system of occupational pensions (Pillar IV), based on the contributions of the insured and the employer.
Contributions to the mandatory private pension system (Pillar II) currently reach 4% of employees’ gross income and are set to reach 6% by 2016.
Pillar II funds’ assets have kept an accelerated growth over the past year (September 2012-September 2013), at a rate slightly above 45%. The average yield of the mandatory private pension funds reached a three-year high of 11.75% in 2013, and their total net assets stood at RON13.94 billion in December 2013, according to the Pension Fund Association (APAPR).
Voluntary private pension funds started operating in Romania in May 2007 and mandatory pension funds in May 2008.