The bill regulates private pension payment for the 5.6 million people who are currently contributing to mandatory (Pillar II) and voluntary (Pillar III) private pension funds.
Pillar II contributors receive pension after they retire. The retirement age has been set at 57 years and two months for women and at 62 years and two months for men. By 2030, the retirement age will increase to 63 years for women and 65 years for men.
On the Pillar III segment, pension payments will be made after the contributor turns 60 and paid contributions for at least 90 months.
According to the bill, mandatory and voluntary private pension fund administrators must inform contributors 30 days before retirement conditions are met about their gross pension contributions, their net assets and the obligation to choose a private pension provider.
Private pension system regulator CSSPP will choose a pension provider if contributors have turned 70 and have not made a choice themselves, reads the bill.
The private pension provider sets the sum to be paid, based on actuarial data and the contributor’s net assets.
Private pension may be paid as an annuity for life, for a period of five to ten years, or a fixed sum paid until a set date. The sums will be paid monthly to contributors’ or their legal representatives, through postal services or in their bank accounts. Transaction costs will be covered by contributors, according to the bill.
The financing rate of a private pension provider must be at least 105%.
If the financing rate falls below 105%, the pension provider will be supervised for at most six months. During this interval, it must increase the fund’s reserve. If the financing rate drops below 100%, the private pension provider will have its administration authorization withdrawn, reads the bill.