“This indicator is well above the total inflation rate in the same period, of 36.3%, and the average annualized inflation rate for the period, of 2.95%,” it said.
Out of EUR10.2 billion managed by funds on Pillar II at the end of 2018, over EUR1.5 billion are net gains from investments for the 7.25 million contributors to the mandatory private pension system.
“This amount is net of all administration fees. The performance of pensions funds in Romania and the world has a degree of volatility as it closely follows financial markets and the economy as a whole. This performance is heavily influenced not just by the economy but by political decisions such as the adoption of emergency decree 114/2018, which led to steep and serious drops on the Bucharest Stock Exchange, where pension funds have invested massively,” the association noted.
The tax decree requires major capital hikes from Pillar II fund administrators by the end of the year, in some cases as much as ten-fold. Romania’s government has also frozen and reduced contributions to the mandatory private pensions system over the past years instead of raising them gradually, as planned when the system was introduced.