Romanian regulator allows contributors to pull out of mandatory private pension funds

Romanians who have already contributed for at least five years to the second pillar of the pension system can already pull out of the private pension funds and redirect their contributions to the first pillar, namely the state pension fund, according to procedures passed on February 28 by the financial market regulator ASF, local Adevarul reported.

However, the application that contributors have to fill is so complex that no mass migration to the first pillar is expected any soon despite the strong rhetoric pursued by the ruling coalition against the second pillar.

The vast majority of the contributors have been assigned randomly to one of the seven private pension managers, and most of them don't even know about the second pillar not to mention the name of the fund manager. Thus, most contributors don't know all the data needed to fill the application. The required data includes the series and number of the individual instrument of accession, the name of the privately administered pension fund, and the name and address of the administrator. Other essential elements are the employer's name, along with the Unique Identification Code (of the employee) as well as the name of the [public] pension house where the participant is registered.

This application is accompanied by a copy of the identity document valid at the date of filing the application and a declaration of responsibility of the participant to the 2nd pillar, acknowledging that he has requested the cessation of payment of the individual contribution to the privately managed pension fund, "in accordance with the provisions of art. 81, points 3 and 4 of the Government Emergency Ordinance no. 114/2018".

The seven mandatory pension funds in Romania manage over EUR 10 billion in assets for 7.27 million participants.

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