Six out of seven private pension managers operating funds under the 2nd Pillar say their work in Romania is under “significant uncertainties” after the Government imposed a series of “absurd demands” through emergency ordinance (OUG) 114/2018 without even explaining their need, Adevarul daily informed.
In essence, OUG 114 requires massive capital increases operated by fund managers (seen by managers as the main issue) and cuts the fees managers are entitled to charge. When amending OUG 114 in April, the Government left in limbo the pension funds issue while significantly reducing the harsh provisions initially drafted for the banking market.
The Government was asking fund managers to invest in Public-Private projects, which they accepted in principle. However, since the legal details of such investments require precise adjustment of the regulations (including that of the pension funds), the Government abandoned the topic.
The representative of fund managers Radu Craciun told Adevarul daily that no further negotiations have taken place with Government and the financial market regulator ASF will probably draft the procedures for the capital hikes required under OUG 114.
As time goes by, fund managers are approaching the deadline for the capital increase: the first capital increases should be carried out by mid-2019, and the final ones by the end of the year. Emergency Ordinance 114 is demanding that the pension pillar II fund managers should bring, along one single year, capital increases of around EUR 800 million. The amount is twice as much as the combined gross commissions earned by the fund managers in the past 11 years.
(Photo source: Adobe Stock)
The deadline for the private managers of mandatory pension funds (the 2nd Pillar) to increase their share capital will...