Romania’s Government is working on a law package for the mandatory private pension fund system (pillar II), prime minister Viorica Dancila said on Tuesday, April 3, without providing any further details.

Finance minister Eugen Teodorovici said, however, that people should be encouraged to move from the mandatory private pension funds (Pillar II) to the state pension fund (Pillar I). He added that the mandatory pension funds will become optional and Romanians will be able to opt between contributing to these funds and contributing only to the state pension fund. Labor minister Lia Olguta Vasilescu made a similar statement at the beginning of March.

Rumors about the ruling coalition’s intention to partly nationalize private pension funds have been circulating since last year, but PSD denied any such intention. However, the fiscal measures adopted by the PSD government led by Mihai Tudose at the end of last year have led to lower contributions to private pension funds, as the contribution quota was reduced from 5.1% of the gross wage to 3.75%, starting January.

EC worried about the lower private pension contributions in Romania

editor@romania-insider.com