Pillar II Pension Funds Post Average Yield of 11.8% in 2019

The total yield of Pillar II funds between 2008 and 2019 stood at 154%, meaning an average annualized yield of 8.35% throughout the existence of this pension system.

This indicator is well above the total inflation rate in the same period, of 41.8%, and the average annualized inflation rate for the period, of 3,05%, the association noted.

Of the EUR13 billion managed by the seven funds on Pillar II at the end of 2019, over EUR2.6 billion were net gains from investments for the 7.4 million contributors to the mandatory private pension system. The amount is net of all administration fees, which are currently among the most competitive in Europe following legislation changes in the past year.

The association underlines that 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 said the total yield on Pillar II lost nearly 4 percentage points in less than two weeks at the end of 2018, making 2018 the sole year since the start of the system when the annualized yield stood below the inflation rate.

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