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There are two weeks till Romanians may still cast their options regarding the private pension fund they want to subscribe to, and data shows most of them already did that.
There are two weeks till Romanians may still cast their options regarding the private pension fund they want to subscribe to, and data shows most of them already did that. By December 15, 2007, some 2.9 million, or 85% of the Romanians subscribing to the public pension fund also subscribed to a private pension fund, which would take over what came to be called the second pillar of the pension system.
The breakdown of market shares stays like this: the ING pension fund took over 33% of the market [with some 958,000 subscribers]; Alianz Tiriac fund comes second, with 25.78% of the market [with some 749,000 subscribers]; and Generali pension fund comes third, with 9.44% of the market [or some 274,000 subscribers].
Others are Aviva [with 237,000 subscribers], Interamerican [with 176,000 subscribers], AIG [with 171,000 subscribers], BTAegon [with 87,000 subscribers], BCR [with 83,500 subscribers], BRD [with 71,000 subscribers], Omniasig [with 45,000 subscribers], Bancpost [with 17,000 subscribers], OTP [with 16,000 subscribers], Prima Pensie [with 14,000 subscribers], KD [with 3,700 subscribers], MKB Romexterra [with 1,425 subscribers], AG2R [with 588 subscribers], Zepter [with 163 subscribers] and Marfin [with 113 subscribers].
Introducing the second pillar to the pensions system was not without hiccups.
The campaign for launching the subscriptions to the private pension funds was criticized for being weak. Also, trade unions criticized the system which would make for women to have lower pensions than men. By mid-December the Commission for Supervising the Private Pension System received 433 complaints regarding false statements made by subscribers.
The new system means that the current 9.5% of the gross income going into the pension system would be split, with 6% going to the private pension funds and the rest to the public pension fund. However, the 6% contribution would be reached in eight years. For the first year, the contribution to the private pension funds is capped at 2%.
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Until now, the pension system was based on a tacit contract among generations, meaning that the contributions to the public pension fund of the people working paid the actual pensions of the retirees. The new system of private pensions funds means that each person's money would go into his or her own account, to be used as a pension upon his or her retirement.
Subscribing to a private pension fund was mandatory only for people under 35. This is why it came as a surprise the news that a third of those subscribing by the end of October were over 35, meaning that people hoped that the new system would bring them a better and more secure income upon retirement.
- Translated by Anca Păduraru
