Romanian president promulgates law on 401(k)-like personal retirement account
President Nicușor Dan promulgated on Friday, October 16, the draft law that will allow Romanians to save for retirement through stock market investments and control their own money, modeled after the American 401(k) system.
iulian ernst · Journalist
· 1 min read
The law was adopted in September in Parliament. Nicușor Dan has now promulgated the project, which regulates the legal framework for retirement accounts, called Savings and Investment Accounts (CEI), modeled after accounts similar to the 401(k) and IRA (Individual Retirement Account) in the US.
The money in these accounts will be able to be invested in shares, bonds, investment funds, and other eligible financial instruments, traded on regulated markets in the European Union or on equivalent markets in member states of the Organization for Economic Cooperation and Development (OECD), Economedia.ro reported.
The project excludes direct investments in derivative financial instruments, with certain exceptions for investment funds that use them to track an index or to hedge risks.
One of the main advantages proposed is the tax exemption for income and gains obtained from investments within CEI accounts. These will not be included in the calculation base for income tax and mandatory social contributions during the period of holding the account. Also, dividends received in these accounts will be tax-exempt.
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