The assets under management in the Romanian pillar II pension system have reached a record high of RON 107.7bn, as at 22 May 2023, almost exactly 15 years after its introduction, according to APAPR.

This is a more than £10bn increase from the RON 96.4bn of assets under management reported at the end of 2022.

Established on 20 May 2008, there have been RON 84.2bn of contributions to the system over the 15 years and total payments of RON 1.4bn to around 108,000 beneficiaries.

The pillar II system now had 8.05 million members.

Since its launch, the system has had an average annual investment return of 7.41 per cent, with average annual inflation sitting at 4.38 per cent for the same period.

In monetary terms, there has been a net return of RON 24.9bn over the past 15 years.

"Fifteen years after the launch of mandatory private pensions, in 2023 we see evidence of the resilience of the system,” commented APAPR spokesperson, Mihai Bobocea.

“On the one hand, we have the full recovery of the declines in 2022 caused by negative developments in government bonds and stock markets, and on the other hand, a significant acceleration of payments in the first quarter of this year, which are 58 per cent higher than in the same period last year.

“After 15 years, we can celebrate the anniversary of a success story, which, unfortunately, was not used at the originally planned level."

APAPR stated that, due to its late launch, pillar II funds in Romania are still underdeveloped compared to other Central and Eastern European countries.

The net assets managed by the private pension funds of Pillar II in Romania represent 6.8 per cent of GDP, compared to an average of around 67 per cent of GDP of most OECD member states.

According to research by the ISRA Center, 83 per cent of Romanians are not saving anything for retirement.

More than half (55 per cent) fear that the state will not be able to provide them with a decent pension, while only 37 per cent trust the state will not have a problem with the payment of pensions.

The National Receovery and Resilience Plan (PNRR), developed by the Romanian government and the EU, aims to increase pillar II contributions to 4.75 per cent from 1 January 2024, eventually rising to 6 per cent.

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