“On the mandatory private pension segment, the number of participants will be higher than at the end of 2011, as employees of the defense, public order and national security systems join the system. After the contribution rate is increased to 3.5%, transfers to Pillar II will amount to 2.5 billion lei (EUR576.8 million) and will exceed RON9.5 billion (around EUR2.2 billion) in December 2012,” said Mircea Oancea, head of private pension regulator CSSPP, in an event hosted by XPrimm.
According to CSSPP data, the assets of mandatory and voluntary private pensions increased 47% in 2011, to RON6.85 billion, accounting for 1.25% of the gross domestic product (estimated at RON574.83 billion in 2011 by CSSPP).
In December 2011, Pillar II had 5.5 million participants, while voluntary pension funds had gained about 40,000 new clients, reaching 260,393 contributors, 17.5% more than in December 2010.
The assets of the nine mandatory private pension funds increased 48.1% last year, to RON6.42 billion, while the assets of Pillar III grew 32.8%, to RON435.65 million. The regulator expects voluntary pension funds to have over 300,000 contributors and assets in excess of EUR125 million by the end of the year.
Pillar III will be relaunched in 2013, according to Oancea, as changes to the Fiscal Code will allow complete fiscal deductibility for contributions paid by businesses for their employees to voluntary pension funds, up to the amount of EUR400 per year (around RON144 per month).
Oancea reminded that the maximum deductible amount might be raised to EUR1,000 per year, to increase the appeal of the voluntary pension system. (EUR1=RON4.334)