RO market regulator to cut fees charged by private pension funds managers

The financial markets regulator ASF initiated the procedures for promoting a law by which it would cut the "undeserved privileges" of the private pension funds managers (Pillar II), ASF president Nicu Marcu announced.

At this moment, the managers can charge a one-off fee in the amount of 0.5% of the contribution paid by the subscriber, plus a monthly fee of up to 0.07% of the net assets managed. The former might be dropped, ASF head implied.

"We must correct this (double fee), and in the next period, I will urgently propose a draft normative act, which aims to improve the regulatory framework for the activity of pension fund managers, as well as eliminate the fees charged on the contribution of participants to these funds," he said.

Pension fund managers' fees were subject to restrictions imposed under the notorious Ordinance 114/2018 (that included the so-called "greed tax"), partly reversed already, which prompted panic among investors. It was promoted by the Social Democrats at the end of December 2018.

The statement made by the ASF president comes in the context of the net unit value of all privately managed mandatory pension funds having dropped amid adverse conditions at the Bucharest Stock Exchange (BVB) and dwindling prices of bonds driven by rising interest rates.

Since the beginning of 2022, the average decrease for Pillar II funds is 7.2%, according to Ziarul Financiar calculations, with the losses ranging from minus 8% for subscribers to NN to minus 5% for Metropolitan Life fund's subscribers.

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