Romania’s president Klaus Iohannis promulgated the law provisioning for upping by 1pp to 4.75% the mandatory contributions to the privately managed pension funds (Pillar II), effective January 2024, Bursa reported.

The Government passed an emergency ordinance with this end earlier this year - nearly two years before the change became effective - and the lawmakers passed it quickly.

The move was a milestone of the National Recovery and Resilience Plan (PNRR).

Under the initial calendar sketched when the privately managed pension system was set up in 2008, the contribution to the second pillar should have reached 6% since 2016.

Assuming that the total contribution to the pension system is maintained at 25% of the gross wage, the contribution to the first pillar, or mandatory pay-as-you-go state-managed pension system, will consequently decrease to 20.25%.

The Pillar II pension funds are coming under scrutiny amid the negative yields posted recently and frauds surfacing at BRD Pensii Private pension fund manager. 

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andrei@romania-insider.com