The recent proposal to reduce the contributions to the mandatory private pension funds would lead to the deliberate bankruptcy of the private pension system, affecting both the fund administration companies and the five million participants. Studies show that a contribution which is one percentage point lower, over a 30-year time frame, will lead to a 30 percent lower pension, according to the Romanian Pension Funds' Association (APAPR).

“This measures will destroy 12 years of legislation and institutional work in the private pensions area and an acknowledgment of the bankruptcy of the public pensions system, but, paradoxically, also the cancellation of the main solution for this problem,” said Crinu Andanut, president of the Romanian Pension Funds' Association (APAPR).

After two years, the mandatory private pensions funds have an average yield of over 18 percent, which is much higher than the 5 percent inflation, according to Andanut. He also said the workers' unions are constantly challenging pension funds, instead of representing the interest of the employees.

The association has sent letters of protest to the Romanian Presidency, the Romanian Government and the International Monetary Fund.

Read more about the decision to cut the contributions to mandatory private pensions here.