Romania’s government is considering lowering the share of social security contributions that go to mandatory private pensions, saying state pensions have better yields. Previous governments have repeatedly frozen contributions to mandatory private pensions.
Tudose again denied any plans to nationalize mandatory private pensions.
“We don’t want to remove Pillar II and we’re don’t want to take out any money from Pillar II. That money stays there but if it’s better for Romanians, we’ll direct the better part of contributions to state pensions,” said Tudose.
Mandatory private pension funds in Romania had a total 6.92 million participants at the end of July 2017, compared with 6.91 million in June, while total assets rose nearly 3% from the previous month, to RON37.19 billion, according to data from the Financial Supervisory Authority (ASF).
In July 2016, the number of participants reached 6.69 million and assets stood at RON28.5 billion.
Back in June, finance minister Ionut Misa, ahead of being appointed minister, said the government would eliminate the mandatory private pension system known as Pillar II. He said the system would be eliminated towards the end of this year. He later took it back, after prime minister Tudose denied any such plans.
In April, Romania’s financial authority on fined private pension fund NN Pensii for e-mailing its clients to warn about potential political decisions that would affect their savings, such as freezing contributions and even nationalizing private pensions.