The pension of a participant to the private pension systemwill be 1,600 euros smaller because the government did not complywith the initial plan to boost contributions.
The amounts accumulated in the accounts of mandatory privatepension funds (2nd pillar) are 800 million-RON (200 million euros)smaller than if contributions to these funds had not been frozenlast year at 2%, instead of being raised to 2.5%, according toEmilia Bunea, general manager of ING Pensii, the largest privatepension manager on the Romanian market.
2nd pillar pension funds started to collect contributions inMay 2008 - amounting to 2% of the participants' gross salary. Thelevel was supposed to be boosted by 0.5% a year, to 6%. Thecontribution was however frozen by the government at 2% in 2009 dueto the rising deficit of the social security budget, consideringthat contributions to private funds are subtracted from thisbudget.
"If the legal schedule had been respected, assets could haveamounted to 2.7 billion RON in 2009 and to 5.4 billion RON in 2010.In 2009 and 2010 the cumulated losses incurred by participants dueto the fact that the original schedule has not been applied willamount to 800 million RON," Bunea said yesterday at the "MediafaxTalks about Private Pensions" seminar.
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