The beginning of reform in the Romanian pension system has put the business environment on alert: insurance companies voice interest in managing the pension funds to be established at some point but are unhappy with the law as it is now, while employers are faced with fiscal issues that are not very clear and with the need for a new human resources policy.
The shift from the public pension to the private pension system is a significant challenge for corporate human resource departments, as the occupational pension system is based on the solidarity between employer and employee.
"Besides the compensation packages already in place - salary, benefits, other non-cash perks, the occupational pensions will in their turn become instruments used to attract and motivate employees and make them loyal," Ruxandra Stoian, senior manager with PricewaterhouseCoopers (PwC) told the "Employers versus private pensions" seminar organised by Ziarul Financiar and ING Nederlanden at the end of last week.
"The sooner the system is implemented, the better. Major international financial institutions are already probing the Romanian market in view of management of these news funds that will be established," Lafarge Romania's Corneliu Fecioru said.
Although the laws will come in force after 2005, the players on the insurance market are already bracing for this new market.
Jan Nijssen, general manager of ING's pension department says the main macroeconomic benefits of a private pension system are the rising people's savings, the development of the capital markets, the establishment of more powerful connections between the public and private sectors, as well as an improvement in the discipline and transparency in the public sector.
"All the other Central and Eastern European countries that have implemented this system have seen a significant increase in the funds on the capital market. Take Hungary for instance, where the private pension funds have come to account for approximately one quarter of the total capitalisation of the stock exchange. All these flows of cash turn into long-term resources that can be invested in extensive infrastructure projects," the ING official said.
sorin.pislaru@zf.ro
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