Romania’s long-awaited private pension reforms could face further delays, after authorities confirmed plans to launch an extended public consultation on the draft law in response to industry and association concerns.

Initially subjected to a brief 10-day consultation in June, the reforms aim to help Romania meet the requirements to join the Organisation for Economic Cooperation and Development (OECD) and resolve long-standing issues, as payout legislation has been overdue since 2011.

Whilst privately managed pension funds in Romania were established 17 years ago with a promise of payout legislation within three years, several failed attempts have left the system operating without a permanent payment framework.

Given this, the Association for Privately Administered Pensions in Romania (APAPR) described the draft legislation as “the last link in the legislative architecture of the private pension system, one that should have appeared 16 years ago”.

Developed by an inter-institutional working group, including the Ministry of Labour, the Ministry of Finance, the Financial Supervisory Authority (ASF), and APAPR, the bill seeks to establish a long-overdue legal framework for private pension payments.

It draws on European Union and OECD best practices to introduce private pension payment funds to be managed by authorised providers such as pension fund administrators, life insurers, or investment managers.

Key features include continued investment of accumulated savings during the payment phase, with scheduled withdrawal funds limited to low-risk fixed-income assets, along with tax advantages compared to lump-sum or short-term withdrawals.

The legislation allows an initial withdrawal of up to 25 per cent of total assets, with the remainder paid out over at least 10 years, and aims to guarantee a minimum income equal to the social allowance for retirees, while providing flexibility for higher-balance savers.

Speaking during a press briefing, ASF president Alexandru Petrescu described the draft legislation as a “strategic and priority measure”, which is "essential" to completing Romania’s private pension framework and meeting OECD standards.

This is particularly important ahead of September, as Romania is due to present its progress to the OECD Financial Markets Committee, with the adoption of this law seen as a condition for accession.

This is not the only key factor in terms of timing, as Romania is also approaching what is expected to be a "peak load" of retirements in 2030.

Indeed, analysis from APAPR showed that the €1bn threshold for payments already made to beneficiaries of pillar 1 and 2 was recently passed earlier this month (August 2025). 

According to APAPR, around RON 4.2bn was paid to approximately 250,000 beneficiaries from the mandatory Pillar 2, while around RON 890m was aid to approximately 97,000 beneficiaries from the optional Pillar 3.

Given this, the APAPR argued that the rising number of payments justifies adopting modern and efficient legislation for the payment phase, aligned with best practices from developed countries.

However, the bill's first reading in the Romanian parliament has highlighted a number of industry concerns, as not all stakeholders are supportive.

The Romanian Association of Financial Services Users (AURSF), for instance, argued that the draft “does not take into account the interests of participants, but those of the industry".

AURSF’s primary concern is the proposed restriction limiting retirees to an initial 25 per cent withdrawal, instead of the current option allowing a full lump-sum withdrawal.

The group claimed that all of its proposed amendments were rejected during the initial 10-day consultation in June, and said that calls for a public debate have so far been ignored by authorities.

"We will use all legal levers to continue to request that the draft law be amended, if not by the Romanian government, then at least in parliament, so that it truly responds to the interests of participants and beneficiaries of private pensions," the group stated.

Similar tensions were also seen during the press briefing, as whilst Petrescu repeatedly stressed that this legislation should have been introduced much earlier, reporters repeatedly hit back with concerns that the government is changing the “rules of the game” for savers approaching retirement.

"At the moment, people have the right to withdraw this money, and when they contributed and made a plan, maybe some wanted to withdraw the entire amount," one reporter stated.

"It is not their fault that in 2030, you will have a peak load. Shouldn't those who administer these pensions also manage the peak load in 2030?"

"What do you say to the almost 9 million Romanians, some of whom might believe that at the moment the state.. is withholding the money that they have transferred to the second pillar?" another asked.

But Petrescu once again emphasised that the number of pensioners set to withdraw these funds will soon experience a surge, emphasising that "there is no pension fund anywhere in Europe where you can withdraw all your money".

"All pension funds have a transitional period, because it is the accumulation period," he explained.

He also argued that rather than focusing on why these changes were not made earlier, the aim now should be making the reforms happen, emphasising that "it must happen to provide predictability to those who contribute to these pension funds today".

“We must exit transitional legislation, 17 years later,” he said.

Whilst some reporters raised concerns that the changes could lead to legal action, Petrescu confirmed the government had sought opinions from the Ministry of Justice, the Legislative Council, and the Economic and Social Council (CES).

However, Petrescu acknowledged that the law is still at an early stage, confirming that the government is looking to hold a further consultation, which will be “more extensive than the one already held".

"Given the large number of participants, we are talking about 9.3 - 9.4 million for the two funds... I felt, together with the Romanian government, the need to expand the public consultation, and I will propose, taking into account the feedback that we have received from the government, as well as ourselves."

As part of this extended consultation, Petrescu said that the group will be holding a roundtable, as has been held on other acts related to the capital market, including government and other MPs.

But whilst the government has suggested that it hopes to finalise the law ahead of OECD review, with tensions between consumer advocates and regulators still high, further delays remain a distinct possibility.

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