The Association for Privately Administered Pensions in Romania (APAPR) has urged the government to stick to the original date of 1 January 2024 for the increase in the pillar II private pensions contribution rate.

The contribution rate for pillar II pensions was scheduled to rise from 3.75 per cent to 4.75 per cent from next year.

However, the APAPR said it had learned that the government intended to postpone the increase again until 2026.

The association said that the postponement proposal “blatantly contravenes” the provisions of the recovery and resilience plan (PNRR), milestone 213 of the financial consolidation of pillar II, which it noted was considered resolved as early as March 2022 and for which the Romanian government has already received the money from the European Union related to the corresponding tranche of the PNRR.

It added that, according to the original law, the contribution rate was supposed to reach 6 per cent of Romanians’ gross income as early as 2016, but this level was never reached and the law was not enacted.

“Postponing again and again the increase of the pillar II contribution is to the detriment of all active employees in Romania, who work, pay their fees, taxes and contributions and who have legitimate expectations for a decent pension, including pillar II,” the APAPR stated.

“In the constitutional spirit of the welfare state and the balance of the fiscal burden, the government is obliged to allocate public funds not only for the payment of today's pensions to Romania's seniors, but also to allow the active generation to secure a better financial future, including through the second pillar of private pensions.”

Pillar II in Romania currently manages around €25bn across 8 million pension savers.

The APAPR appealed to the government to comply with the legislation in force and previous commitments to the European Union, and increase the contribution rate of pillar II pensions to 4.75 per cent from 1 January 2024.

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