Private pension market three years from launch

Privately managed pensions (pillar II), considered to be the business of the next decades as they will rake up assets worth tens of billion euros, are today entering their fourth year, with over 5 million clients and managed assets worth around 880m euros (3.7bn RON).

In the three years in business, the system has met with hurdles rather than boosts from authorities, while in developed countries private pensions have been operational for a long time and are seen as the best option for having a decent income when retiring.

Thus, the initial contribution increase calendar has been upset: instead of contributions being raised after the first year, 2009, from 2% to 2.5%, their level was frozen and the increase was applied as late as this year. Moreover, this spring authorities planned to cut the level of contributions from 2.5% to 0.5% to reduce the public pension deficit, an intention that sparked tough reactions from managers.

"I believe we've built a sound system, but we have not been successful in everything: the asset volume is low because of low contributions. We want to reach a 6% level of contributions in a shorter period of time than the initially targeted one, when the economy allows us," says Mircea Oancea, CSSPP chairman.