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The private pension funds operating in Romania said Friday they would file a complaint with the European Union against the Romanian authorities if the latter would make it mandatory for them to guarantee the pension funds
The private pension funds operating in Romania said Friday they would file a complaint with the European Union against the Romanian authorities if the latter would make it mandatory for them to guarantee the pension funds performance would hike pensions with at least the value of the inflation rate.
The proposal for a change in legislation to that effect was made earlier in the week by trade unions and non-governmental organizations and the Senate would start debating next week on a draft law addressing the issue.
“Changing the rule of the game in mid playtime would have a major and negative impact internationally. Foreign investors would perceive Romania as a country with an unstable legislative system and loose interest in the country, with catastrophic effects on the economy and the balance of trade,” said the representatives of the private pension funds in Romania, assembled in the APARP association.
They also said that representatives of trade unions and NGOs were mistaken in their initiative as the system implementing in Romania the private pension funds is of “defined contributions type,” and not “defined benefits type,” which would warrant such requests.
The private pensions operators believe that the current legislation already provides two types of safeguards which made for most operators to perform at the same level of risk and have the same structure of their investment portfolios. This is why APARP said retirees would loose in the long terms, as the investment policies of the private pension funds operators would target short-term investments which would perform at lower levels than the overall inflation rate.
