CFA Romania: Reducing contributions to pillar II pensions jeopardizes Romanians' well-being in the long run

The CFA Romania Society of chartered financial analysts disapproves of the government's decision to reduce the mandatory contribution to pillar II privately managed pension funds from a current 5.1 percent to 3.75 percent in 2018, arguing that the cut in relative value of the contributions leads to a significant reduction in the income of Romania's future retirees, according to a press statement released by the society. 

"Under this decision of the Romanian Government, the future pensioners are increasingly more exposed to the political will regarding the calculation and the value of the pension computation point in the future, and they have a lesser word to say about their welfare in the long term, which is a worrying phenomenon. Romania has committed itself under the 2015-2018 Convergence Programmme submitted to the European Commission by the Ministry of Public Finance to ensure a contribution of at least 6 percent of the gross pay of the employees to the privately-managed pension funds, precisely to secure the sustainable reform of the pension system, which is currently facing a huge deficit." 

According to CFA Romania, two thirds of the current pensions are paid for off the current employees' contributions, and one third off government loans. That is why there will be increasing pressures on the social security budget and private pension will be a vital source to ensure decent living for millions of retirees. AGERPRES.