The Romanian Government is open to negotiations on the capital requirements imposed on mandatory private pension fund managers (Pillar II), finance minister Eugen Teodorovici said after a meeting with representatives of the parent groups of the seven fund managers on the local market, on March 5.

For this, the pension fund managers have to reach an agreement with the Government on supporting investments in priority areas such as healthcare, energy, infrastructure and the development of small and medium-sized businesses, Teodorovici added, quoted by local Profit.ro.

It's unclear what kind of projects the Government has in mind for being financed by the pension funds, though, since the regulations stipulate a specific distribution of the assets in their portfolios and forbid risky investments. Meanwhile, the Government seems to suggest social investments with limited profitability.

Under the emergency ordinance 114/2018, six of the fund managers have to increase their capitalization to 10% of the assets managed, with the seventh one being required a 7% capitalization rate. Together, they are expected to come up with EUR 800 million in fresh capital by the end of the year, which they see as excessive.

Romania’s Government reportedly asked the parent groups active on the local fund management market to come up with examples of capitalizations they are required to observe in other countries, and the negotiations will continue based on those figures, Profit.ro said quoting unofficial sources.

editor@romania-insider.com

(Photo source: Gov.ro)