In 2024, approximately 133,000 new Romanian customers began saving for retirement with a Pillar 3 pension, marking a 40 per cent increase from 2023, according to the Association for Privately Administered Pensions in Romania (APAPR).

The research found that the total number of participants in the 10 voluntary pension funds reached almost 833,000 at the end of 2024, reflecting a “high” level of confidence in private pensions.

In 2024, Romanians transferred a total of RON 752m to their personal accounts from Pillar 3 contributions, 25 per cent more than in 2023 and also a “record” value for the system.

In addition to this, the total amount managed by Pillar 3 (net assets) exceeded RON 5.5bn at the end of 2024, up 17 per cent compared to 2023, an all-time high for Pillar 3.

The research also revealed that in 2024 the 10 voluntary pension funds made approximately RON 150,000 in payments, marking a 32 per cent increase from 2023, to a total of 11,800 beneficiaries, which is a 5 per cent rise from the previous year.

The total payments made by Pillar 3 over the entire operating period (2007-2024) was RON 785m to around 91,000 beneficiaries.

APAPR’s calculations found that over the entire operating period, voluntary pension funds generated an average annual return of 6 per cent, compared to an average annual inflation rate of 4.6 per cent.

Pillar 3 yielded a profit of RON 1.45bn for participants after accounting for all fees and the contributions received for administration.

Currently, contributions to Pillar 3 are deductible up to €400 a year for both individuals and employers. The deductibility ceiling has not been increased since 2009, which APAPR said has reduced the attractiveness of the system and discouraged additional savings for old age.

Therefore, APAPR said it welcomed the government's promise to increase this ceiling, according to the assumed government program.

APAPR suggested that the increase in the tax deductibility for Pillar 3 is likely to encourage both individuals and companies to contribute additional income to retirement while reducing the pressure on the public pension system.

All Romanians who register professional income (employees and those with self-employed activities) can contribute to Pillar 3 of optional pensions, but also employers, who can offer additional contributions to Pillar 3 on behalf of employees, as part of the extra-salary benefits package.

Participants in Pillar 3 can withdraw their accumulated money at any time after reaching 60 and contribute after this age. The money saved in Pillar 3 can be received either as a lump sum payment or in equal monthly instalments over a maximum period of five years.

If a participant dies, the money accumulated goes to the legal or testamentary heirs.

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