Romanian Private Pension System Evolved Well in 1Q/2019, Says Watchdog VP

The Romanian private pension system had 7.79 million contributors and managed assets totaling RON53.21 billion at the end of the first quarter of 2019, said Dan Armeanu, vice-president of the financial supervision authority overseeing the private pension system.

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Managed assets grew 7.28% at the end of March compared with end-December 2018 and accounted for 5.5% of gross domestic product, he said.

“A decade after launch, the private pension system shows the strength and security of a mature market, with considerable assets and a critical mass of contributors, ensuring its long-term stability and sustainability,” said Armeanu.

In the first quarter, 59,800 people were randomly assigned to a mandatory private pension fund. The percentage of randomly assigned contributors dropped by around 45%, indicating increased interest towards the private pension system.

During the same period, 9,445 new contributors joined voluntary private pension funds, indicating confidence in the system and increased interest in long-term saving.

In January-June 2019, only 215 contributors opted out of the mandatory private pension system and had their savings transferred to the state-manged pension pillar.

In March 2019, the average value of a private pension account stood at RON7,101, 6.45% compared with December 2019. The average voluntary private pension account value stood at RON4,788 in March.

Account values vary depending on contribution value and periods, this the highest average Pillar II account values were recorded for contributors aged 35-39, namely RON19,677 for men and RON18,571 for women.

The investment structure of private pension assets remained conservative and cautious in the first quarter, with Pillar II funds investing 61.3% of assets in state paper and 18.32% in equity, while Pillar III funds invested 58.34% of assets in state debt and 21.13% in equity. Around 20% were invested in bank deposits, corporate bonds and other financial instruments.

Read more: Şeful ASF: Sistemul de pensii private a avut o evoluţie pozitivă

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