“When people born in 1966-1971 retire, there won’t be enough resources in the current pension system for pensions higher than 15% of their last wages,” said CSSPP vice-president Ion Giurescu at a conference on pensions organized by financial daily Ziarul Financiar.
Giurescu said that the only feasible solution would be to offer young people an opportunity to save a part of their income through a system based on individual accounts and continuous reinvestment.
“In 20 years, their savings will double and in 40 years contributions will increase four times,” Giurescu said.
The first contributions to mandatory pension funds (Pillar II) were made in May 2008.
CSSPP data show that the number of Pillar II contributors hit 5.7 million at the end of August, and their contributions amounted to EUR1.9 billion. The average value of an active individual account on the Pillar II segment stands at EUR562.
The net assets of Pillar II and voluntary private pension (Pillar III) funds amount to EUR2 billion.
According to Giurescu, the sums transferred to the Pillar II funds will not cover all financial needs after retirement.