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APAPR has 20 members and aims for EFRP and FIAP membership

The Romanian Private Pension Funds Association (APAPR) has reached 20 members, which represent almost 100% of the market and has decided the affiliation to specialized international federations, EFRP (European Federation for Retirement Provision) and FIAP (International Federation of Pension Funds Administrators), APAPR announced. 11 mandatory private pension companies (pillar II), 4 voluntary private pension companies (pillar III) and 5 depository banks - this is the APAPR membership to date, after the General Assembly Meeting. Continuare

Romania's mandatory pension funds only have 4,500 foreign participants

ROMANIA. Foreigners that came to work in Romania make up for only 0.1% of the total number of mandatory pension funds' participants (2nd pillar private pensions), that is 4,500 workers, exclusive analysis by has shown. The total number of pension fund participants in mandatory schemes in Romania is close to 4.4 million clients.

Out of the total, only 4,500 participants are of foreign nationality, thus contradicting the hypothesis that foreign workers are responsible for a surge in number of clients to those funds. Pension fund administrators expected to get only 100,000 new customers each year, but instead the first 9 months into the year brought 206,000 new participants - a surge better explained by seasonal workand above-expectations new labour market entrants.

Guarantee Fund for Private Pensions in Parliament until March 2009

ROMANIA. The law on the establishment and functioning of the Guarantee Fund for private pensions could become a reality in the spring of 2009, according to recent legislation adopted bt the Romanian Parliament. According to the new provisions, "within 120 days after the publishing of this document in the Official Gazette, the special law regarding the Guarantee Fund in the private pensions system must be submited to the Parliament". Continuare

Fiscal incentives for voluntary pensions, increased from 200 to 400 EUR / year starting 2009

ROMANIA. Fiscal incentives for voluntary pensions (3rd pillar pension) contributions in Romania will be increased from 200 EUR to 400 EUR per year, for each employee and employer, starting 1st of January 2009, Romania's Government announced yesterday. In other words, contributions to voluntary pension plans will be tax free up to 400 EUR/year if an individual contributes by himself and up to 800 EUR/year if the employer also contributes on behalf of the respective employee. Also, the news is that contributions to voluntary pension plans will be deductible from all taxes (16% flat tax and also social contributions), compared to the current situation, when contributions are only deductible from the flat 16% income tax. Continuare

FIRST FUND MERGER on Romanian 2nd pillar: BCR (ERSTE) buys OMNIASIG (VIG)

ROMANIA, EXCLUSIVE: BCR Leasing (part of ERSTE BANK GROUP) has announced today the acquisition of OMNIASIG Pensii (part of VIENNA INSURANCE GROUP), with the intention to merge the two mandatory (2nd pillar) pension funds managed by BPCR and OMNIASIG. This would be the first fund merger on the freshly launched privte pensions market of ROMANIA. The two 2nd pillar funds would thus form a 200,000 participants fund (market share of 4.6%), ranked 7th among the remaining 13 mandatory pension funds.

The total number of mandatory pension funds on the Romanian market would thus drop from 14 to 13. Now, the fund managed by BCR has 133,000 participants while OMNIASIG's fund has 66,000. By net assets managed, the new fund would have a market share of 4.3%.

Romania's voluntary pension funds: more and more prudent with their investments

ROMANIA. Romania's voluntary private pension funds (3rd pillar pensions) became more and more prudent with their investments - in August, stock market exposure dropped to a 6 month low, to 6.9% (as against 7.9% in July). Thus, the aggregate portfolio of voluntary pension funds in Romania, at the end of August, was the following: 70.8% in government securities and municipal bonds (compared to 71.4% in July), 11.1% in corporate bonds (6.5 % In July), 10.1% in bank deposits (13.5% in July), 6.9% in shares (7.9% in July) and 1.1% in mutual funds (0.7% in July ). Romania's voluntry pension funds managed assets of EUR 15 mln. at the end of August, with prospects to reach EUR 25 mln. until the end of the year.

Romania's mandatory pension funds reduced exposure on shares to 4.2% in August

ROMANIA. The country's 14 mandatory private pension funds (2nd pillar pensions) dramatically reduced their exposure on listed shares during August, reaching only 4.2% invested on the stock markets, data provided by CSSPP exclusively for portal shows. Thus, mandatory pension funds had the following portfolio structure at the end of August: 60% in government securities and municipal bonds (compared to 58.9% at the end of July), 18.2% in bank deposits (22.4% in July), 17.2% in corporate bonds (12.8% in July), 4.2% in listed shares (5.7% in July) and 0.4% in mutual funds (0.3% in July). This is the lowest exposure on shares since the funds inception on 20th of May. At the end of August, the 14 mandatory pension funds managed net assets of 111.5 EUR mln.

HILD launches equity release product on the Romanian market

ROMANIA. The US financial company HILD Management launches its equity release product (life annuities versus real estate properties of current pensioners) on the Romanian market, founder and member of the board John WIRTH told in an exclusive interview. HILD, who has US investment bank Merrill Lynch among its shareholders, was founded in 2003 and is already present in Hungary and Bulgaria. Its official launch in Romania is expected tomorrow, the announcement is to be made by the US ambassador in Romania.

The equity release product targets "asset rich but cash poor" pensioners, who want to "live life to the fullest" - a category WIRTH calls "actualizers". The product is actually simple: HILD takes over the property rights of the pensioners' homes and pays an upfront lump sum, followed by several life annuities (which go on indefinately, until the pensioner-customer passes away). This financial scheme is quite common in Western Europe, along with other similar products, like reverse mortgage. Because of its nature, equity release can be considered in some cases "another philosophy of private pensions".

What listed shares are preferred by Romania's voluntary pension funds

ROMANIA. Bucharest Stock Exchange's most liquid and the growth stars of previous years are the listed shares of choice for Romania's voluntary pension funds (3rd pillar pensions), according to a survey conducted by, based on company data. Voluntary pension funds managed by ING, ALLIANZ-TIRIAC and AVIVA revealed their investment strategy by publishing their "4th annex", the most detailed form of investment reporting.

Until now, Romania's voluntary pension funds (managing only EUR 15 mln. so far) have only invested EUR 1 mln. on the Bucharest Stock Exchange, and they chose the following stocks: Petrom (SNP), Banca Transilvania (TLV), SIF's (1, 2, 3, 5), Rompetrol Rafinare (RRC), Transelectrica (TEL), Transgaz (TGN), Impact (IMP), Flamingo (FLA), Alumil (ALU), Condmag (COMI), Dafora (DAFR), Mecanica Ceahlau (MECF), Prodplast (PPL),  Zentiva (SCD), Socep (SOCP) and Vrancart (VNC).

PwC: Voluntary pensions, the biggest increase in popularity among employee benefits in Romania

ROMANIA. Voluntary private pensions (3rd pillar pension plans) registered this year the biggest increase in popularity among employee benefits offered by multinational companies in Romania, according to the PayWell survey carried out by PricewaterhouseCoopers Romania (PwC). The number of multinational companies to offer voluntary pensions as part of the benefits package increased by 7% this year, making voluntary pension plans the benefits with the fastest increase in popularity. The panel of companies that took part in the survey comprised 250 Romanian companies, all privately-owned, 80% of which were contorlled by foreign capital. 68% of the companies have turnovers larger than 10 EUR mln. a year, and the total headcount of the employees of these companies exceeded 168,000. Continuare

VIENNA INSURANCE began selling voluntary pensions in Romania

ROMANIA. ASIROM CONCORDIA, member of VIENNA INSURANCE GROUP (VIG), began selling voluntary private pensions (3rd pillar pension) last week, official reporting published by the company shows. Thus, VIG officially enters the Romanian voluntary pensions market. The fund managed by ASIROM CONCORDIA has an average risk profile, just like the majority of the funds in this market.

Romania's mandatory pension brokers earned over 100 EUR mln.

ROMANIA. The mandatory pension brokers' total incomes during and after the 4 month signup period officially exceeded 100 EUR mln., sources from CSSPP, the country's private pensions regulator, told The mandatory pension brokers mediated almost 1.3 million of the total 4 million participants that entered the mandatory pension (2nd pillar) system during the 4 month campaign. Continuare

Romania's pension funds outperformed mutual funds in the first 4 months of operation

ROMANIA. Private pension funds managed to outperform the majority of mutual funds in Romania, during the first four months of operation (20th May - 31th August), a survey done exclusively by shows. Half of the mandatory pensions funds (7 of 14) and 37% of the voluntary pension funds (3 of 8) managed to return positive results during those four months, ranging from +0.4% to +7%. The lowest negative return by a pension fund was -5.9%.

At the same time, only 30% of the mutual funds on the local market posted positive returns, those ranging from 0.2% to 3.8%. Also, the mutual funds' negative returns during those four months alone were of up to -30.9%.

BREAKING NEWS: Romanian pensions regulator fines 22 pension brokers

ROMANIA. CSSPP, Romania's private pensions regulator, announced today the biggest collective sanction in its history: 22 pension and insurance brokers were fined, 5 were warned in writing and one was left without its license, CSSPP announced today. The fines range from 3% to 5% of the borker's share capital, where 5% is the maximum fine allowed by the law. Among the brokers that received fines are top10 players on the Romanian market. There are currently 62 pension brokers on the Romanian market, out of which 16 are inactive (never had revenues). Here is the list of the fines and warnings announced today:... Continuare

Romania's largest voluntary pension fund grew by 10% in August

ROMANIA. BCR Prudent, the largest voluntary private pensions fund (3rd pillar) in Romania, grew by 10% in assets managed during August, to reach, 4.55 EUR mln. in assets value, data by the fund has showed. Romania has a freshly launched voluntary pensions market with a lot of growing potential. The fund is managed by BCR Life Insurance and is the largest in the country, in terms of assets.

AThe fund's membership grew by almost 5% in August, to reach 28,215 participants. According to prior data, valid at the end of July, BCR Prudent invested 69.1% of its assets in state bonds, 13.3% in municipal bonds and 17.6% in bank accounts.

Number of empty accounts drops below 15% in the mandatory pensions system

ROMANIA. The number of accounts left empty (without any pension contributions) in the Romanian mandatory private pensions system (2nd pillar) dropped below 15% of the total number of participants for the first time, analysis by shows. The total number of empty accounts is now below 619,000, that is 343,000 lower than at the start of collection in May 2008. In May, the weight of empty (dead) accounts in the system was of over 23%, and now it's only 14.3%. Thus, the collection degree in the Romanian mandatory private pensions system surpassed 85%.

THE INSURER tells Romania's private pensions "success story"

The prestigious insurance and pensions magazine THE INSURER, edited by The Russian POLIS (company similar to Media XPRIMM in Romania) publishes a large analysis about the Romanian "success story" in the private pension reform. The story, written by Media XPRIMM especially for THE INSURER, is included in the September issue of this magazine and can be read here.

ALLIANZ-TIRIAC's two voluntary pension funds grew 12% in August

ROMANIA. The combined assets of the two voluntary pension funds (3rd pillar pensions) managed by ALLIANZ-TIRIAC Private Pensions grew by 12% in fduring August, to reach 4.15 EUR mln. Also, the number of participants to the two funds grew by 1% in August, to over 36.000. At the end of August 2008, Romania's voluntary pensions market comprised of over 120,000 participans and assets of about 15 EUR mln. - the exact data is to be published this week by the CSSPP (Romania's private pensions regulator). Continuare

OTP Garancia, warned by the Romanian pensions regulator

ROMANIA. Voluntary private pensions (3rd pillar) company OTP Garancia, part of GROUPAMA group, received a written warning by CSSPP, Romania's private pensions regulator, for various reporting / marketing errors that came out after a control action by CSSPP at Garancia's headquarters in Bucharest. Also, three marketing agents were also warned in the same way, with a written warning, for delaying the submission of some adhesion papers to the headquarters of the company for more than 5 days - the legal period.

This is the second warning for pension companies in the last few day, after the written warning received last week by Romanian mandatory pension company (2nd pillar) BT AEGON and three of its marketing agents, for miss-selling practices.

Romania: Which mandatory pension funds won the battle for Bucharest

ROMANIA. ING, AIG, BCR and BRD are the mandatory pension funds (2nd pillar pensions) that gathered clients better in Bucharet (Romania's capital) than at national level, talking market share, research by shows. Alltogether, the four funds that conquered Bucharest have a market share (in terms of clients) of 45% at national level, but of 56% in Bucharest. These four funds have shareholders coming from the top of the life insurance and banking industries.

The mandatory private pensions fund of ING has ING Life Insurance as its main share holder (Romania's life insurance market leader), AIG belongs to AIG Life Insurance (2nd biggest player on the same market), BCR belongs to ERSTE's branch in Romania (the biggest bank in the system, by assets) and BRD belongs to SOCIETE GENERALE's branch in Romania (2nd largest local bank).

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Mandatory pensions
(2nd pillar):
»Brief system design

»Official law

»Statistics & Market data

»Market players

»Pension funds

Voluntary pensions
(3rd pillar):
»Brief system design

»Official law

»Statistics & Market data

»Market players

»Pension funds

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» Romania's pensions journey: beginning of the road

» Comparison between the 2nd and 3rd pillar

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