Romania’s voluntary private pension system recorded its strongest year on record in 2025, with Pillar III funds delivering a return of 19.6 per cent.

The ten Pillar III voluntary pension funds generated an investment gain of RON 2.6bn (€515m) net of all fees during the year, according to calculations by the Association for Privately Administered Pensions in Romania (APAPR), in addition to contributions collected from members.

Net assets under management rose to RON 7.4bn (€1.45bn), up 33 per cent compared to the end of 2024, marking a new historical high for the system.

The record results for Pillar III pension funds mirrored Pillar II returns for 2025, which saw their strongest annual performance since the system’s launch almost 18 years ago.

Meanwhile, a record 183,000 Romanians began saving through Pillar III in 2025, 37 per cent more than in the previous record year.

As a result, total membership reached one million, reflecting what APAPR described as "strong public confidence" in private pension funds and the national economy.

During the year, participants paid approximately 940m lei in contributions, 25 per cent higher than in 2024 and the largest annual inflow since the system was launched in 2007.

Over its full operating period, Pillar III funds delivered an average annual return of 6.7 per cent, compared with an average inflation rate of 4.9 per cent.

Voluntary pension funds also significantly increased benefit payments in 2025, paying around RON 272m to 16,100 beneficiaries, representing year-on-year increases of 83 per cent and 39 per cent, respectively.

In addition, total payments made by Pillar III since inception reached RON 1.05bn, distributed to nearly 107,000 beneficiaries.

Under current rules, participants can access their accumulated savings from age 60 and may continue contributing beyond that age.

Upon death, assets are transferred to legal or testamentary heirs.

However, the new law governing private pension payments (Law 2/2026) will come into force on 5 January 2027, with transitional rules allowing either lump-sum withdrawals or instalment payments over a maximum of five years remaining in place until then.

Meanwhile, APAPR reiterated its calls for higher tax incentives, noting that the current €400 annual limit on deductibility for individuals and employers has remained unchanged for 17 years.

The association warned that the threshold has become largely ineffective as a savings incentive and argued that increasing it would help stimulate additional retirement saving, particularly in the context of rising incomes and demographic pressures.

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