Romanian president urges Govt. to clarify situation of mandatory private pension funds

Romanian president Klaus Iohannis has reacted to the situation created by the conflicting information related to the future of the mandatory private pension fund system (Pillar II) in Romania, and urged the government to clarify their intentions for this system. He said that the uncertainty created around this subject, which is the result of conflicting statements that the Pillar II “is abolished but is not abolished, is nationalized but is not nationalized, is suspended but is not suspended,” is very worrying. “This approach, in fact, is already at the very limit of a very toxic dilettante governance, and I urge the government to clarify, once and for all, what they intend to do with Pillar II because we’re not talking about money that belong to the state, or public money, these are the money of people who contribute to Pillar II, and you can’t play with it,” Iohannis said. He added that this is an issue that needs to be clarified and planned in the long run, as “no one pays a pension contribution to receive it the next day,” and this uncertainty makes people lose confidence in the state’s ability to manage the pension system. “It needs a firm clarification, I hope a clarification in the sense that the PSD (the ruling party e.n.) doesn’t touch that money, and then things can be built further.” An information that the government plans to suspend contributions to private pension funds in the second half of this year appeared at the end of last week in the government’ legislative agenda for 2018, which was published on the government’s website. This has triggered harsh reactions from business organizations and the opposition parties, but Ion Ghizdeanu, the president of the National Strategy and Prognosis Commission (CNSP), said the information appeared in the official document by mistake. PSD leader Liviu Dragnea firmly denied any intention of abolishing the mandatory private pension funds and asked the media and other parties not to “roll out false information”. However, he said the government would carry out a thorough analysis of the financial data and present the Romanians exact data on the pension level they would get from the state (Pillar I) and from private pension funds (Pillar II) so that citizens can choose if they want to contribute to one or the other or to both of them. A EUR 10 bln dispute: Private pensions spark new political debate in Romania Irina Marica, irina.marica@romania-insider.com