Romanian regulator still working on exit rules from private pension funds
The department in charge of the private pension sector within Romania's financial market regulator ASF is working on several alternative scenarios for retired recipients of private pensions, but the decision will eventually be political, the Economica.net reported quoting sources familiar with the topic.
There is currently no exit regulation for those retiring from private pension funds.
Meanwhile, the number of pension fund accounts terminated before the legal term, for particular reasons, rose to 5,200 in 2019 from 3,500 in 2018. The aggregate value of the closed accounts doubled to RON 77 million (EUR 16 mln). The recipients are mostly people retired before the legal term and heirs of dead contributors.
Meanwhile, the first contributors to Pillar II with full contribution term will retire in 2024, and the complete regulations should be ready by that time.
One of the possible scenarios envisaged by ASF, which local lawmakers also discussed in 2016, regards an annuity paid to the recipient - in fact, a quasi-annuity since it would be paid for a maximum period of 15 years.
The annuity to be proposed to the pension fund subscribers will not be related to the past cumulative contributions, Economica.net says. Still, it is likely that the annuity will be based on the funds accumulated by the contributor corrected with actuarial factors, probably including the age and health conditions, among others.
At the end of June 2020, 5.36 million participants (72% of the total) had less than RON 10,000 (EUR 2,000) in their private pension accounts, while 2.08 million participants (28% of the total) had more than RON 10,000. Of these, only 0.58 million participants (7.74% of the total) had over RON 25,000 (EUR 5,000) in their accounts.
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