Commissions worth several hundred million RON go yearly to the administrators of the mandatory private pension funds instead of adding up to the pensions of Romanians, said Ionuţ Mişa, the finance minister, quoted by local Mediafax.

“There is a European principle stipulating that you cannot charge commissions for what you have not done. But the administrators of the mandatory private pension funds charge commissions of 2.5%. The money goes into their accounts, instead of going to the pensions of Romanians,” the minister said.

“Probably, in the beginning, the profits of the administrators and managing the pensions for a win were taken into account. But now, I don’t know if that commission makes sense,” the minister said. He also mentioned that the ministry was “in talks with the Financial Supervision Authority and with the representatives of the pension fund managers.”

Romania’s pension system currently has three pillars: the first pillar – the public pension budget, the second pillar represented by the mandatory private pension funds, and the third pillar – the optional private pension funds. Contributions to the second pillar are currently mandatory for employees up to 35 years and optional for those up to 45 years.

The mandatory private pension funds, which make the Second Pillar, were launched in May 2008. In nine years, they have reached 6.9 million contributors and EUR 7.7 billion in assets.

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editor@romania-insider.com