Private pensions fund manager Eureko recently received a court order which canceled a Romanian Competition Council fine in 2012 for an alleged agreement among private pension fund administrators in Romania. The High Court of Cassation and Justice recently OK-ed the appeal submitted by Eureko, represented by law firm Ţuca Zbârcea & Asociaţii, a court decision which is final. In 2010, the Competition Council fined 14 private pension fund managers some RON 5.2 million – or some EUR 1.2 million at the 2010 exchange rate. Nine of these companies appealed the fine in court and the favorable decision to Eureko will open the way for the other cases still being judged, according to Ioana Hrisafi, associate with Ţuca Zbârcea & Asociaţii, who pleaded in front of the Supreme Court.
“It was a challenge to appeal the extremely formal approach chosen by the Competition Council and show the court, by placing facts in their real context and using logical and economic arguments, that the practice incriminated by the Council could not have harmed the market competition and hence be blacklisted,” explained Anca Jurcovan, Managing Associate of the law firm.
The private pensions administration companies were accused by the Council of having agreed to equally share participants who were supposed to be allocated randomly back in 2007. The biggest fine applied in 2010 went to ING Pensii – EUR 370,000, while Allianz – Tiriac Pensii got a EUR 296,000 fine. The other companies which also received a fine were Aegon, Alico, Aviva, BCR Pensii, BRD Fond de Pensii, Eureko, Generali, KD Real Management, IMO Property Investments, OTP Fond de Pensii, Prima Pensie and TBIH Management Services. Five of these pension administrators have made an exit from the market in the meantime, being absorbed by BCR Pensii and Eureko, which had to pay the fines on their behalf.
Private fund administrators said that at the start of the private pensions system there were no clear procedures to establish how to resolve the situation of those who had signed two contracts. The measure they had taken was meant not to sanction the clients by distributing them to a third fund, which was not part of their individual option. The mediation procedure was supervised by the Private Pensions Surveillance Commission.
Romanian employees under 35 are contributing 2.5 percent of the gross salary to a private pension administrator as contribution to the mandatory private pension fund. The system was started in 2007.
The value of the Romanian private pensions’ net assets (Pillar II) recorded a year-on-year growth of 47.3 percent in January this year, to some EUR 2.2 billion, according to the Supervisory Commission of Private Pension System (CSSPP). Compared to December 2012, the growth was 4.7 percent.