Scheduled to be established as of January 1 2005, the occupational pension funds have already found their first customers. Moreover, some of the insurance companies say they are ready to enter the market, while others say they are interested but the law needs changing, being too restrictive at present. With 200,000 contributors, the amounts accumulated in the first year could reach 80 million euros.
Unions from the oil and constructions industry, two of the industries that make a significant impact on Romania's Gross Domestic Product, have openly voiced interest in even having direct involvement in the management of occupational pension funds.
Liviu Luca, chairman of the Federation of Free Independent Unions of Petrom and of the Employee Association of that company says he will be directly involved in this business.
"We are interested and we will go for a concrete involvement in this field. I cannot provide any more details for now," Luca said, who represents more than 70,000 people.
The Federation of Free Independent Unions of Petrom, as well as the Employee Association are involved in oil, banking, farming and the media industry. They are also active in the insurance field through Delta Asigurari (Delta Insurance), which could be used to enter the occupational fund management sector.
At the same time, the officials of the Constructors' Social House, which represents more than 130,000 employees in the constructions industry, have confirmed their interest in becoming involved in the field.
Other powerful union organisations speaking for hundreds of thousands of employees in various industries are in favour of the establishment of occupational pension funds. According to union sources, one of these is the National Union Bloc (BNS). The BNS leader, Dumitru Costin, could not be reached for comment by the time of going to press.
However, not all unionists are happy with the effect of the new law. "We have not made plans for a concrete involvement in this sector. Speaking of the capitalisation pensions, we find it inequitable that the insurance companies, without making even the slightest effort in investment, could get to manage a lot of money and charge a lot of money for doing so. The management costs for an employee that contributes for 30 years reach up to 28%-30% (if management falls upon an insurance company), compared to the current 3% a month," a CNS Cartel Alfa representative stated.
The establishment of the Occupational Pensions Department by the Insurance Supervision Commission gives the green light to the formation of such funds, made legally possible by a law passed this year.
Catalin Stroe, deputy chief executive of Asirom says the company is interested in this market and has even allocated 2 million euros for a capital inflow at Concordia, a small insurer specialising in private pensions that Asirom acquired in 2002.
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