Romania's mandatory pension market (Pillar II) will reach assets of 850 million lei by year-end and some 4 million participants, but the level of assets remains low, as they represent only 0.17 percent of the gross domestic product (GDP), said Mircea Oancea, head of market watchdog CSSPP.
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The 14 pension funds on the market currently administrate net assets of 500 million lei and count some 3.8 million clients.
Oancea explained pension funds witnessed a difficult period lately in terms of investments on the capital market. However, there was a significant evolution on Pillar II by September 30, following a structure which allowed administrators to invest contributions in low-risk instruments.
The head of CSSPP also mentioned it is possible to witness a recession which could also affect the private pension market, referring to the worldwide crisis.
About 80 percent of the assets managed by mandatory pension funds are placed in state bonds and bank deposits, Oancea said, adding the funds have only a 3 percent exposure on the capital market.
The pension system was reformed last year in May. Apart from the traditionally state-collected pensions (Pillar I) and the private ones (Pillar III), a new type appeared, the mandatory pensions privately managed (Pillar II).
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