Gov't announces reduction of Pension Pillar II management fee from 2.5pct to 1pct, APAPR reacts

Management fee for Pension Pillar II will decrease from 2.5 percent to 1 percent, and a person can withdraw from a pension fund, on individual demand, after a minimum of five years of participation, Finance Minister Eugen Teodorovici announced at Victoria Palace on Tuesday. 

The provision is contained in an emergency draft for fiscal-budgetary measures, which is to be adopted by the Government by the end of this year. 

"Moreover, the administration fee, which is 2.5 percent today, will drop to 1 percent. And you will see in the text of the ordinance and, as I was saying, the explanations of each colleague will show very clearly what the reasons are, what the arguments for such a decline are, because the Pension House is carrying out much of the activity, we know very well, and then, I think it is also justifiable that these management fees, which for ten years have had a fairly high value, as we know very well, are reduced, for the benefit of those who are participating in Pension Pillar II," explained the head of Finance. 

The second commission, of 0.05 percent per month from assets, will also change depending on the fund's performance. 

The measures proposed by the Government Ordinance (OUG) for private pension Pillar II are de facto abolishing this saving system of the population for the retirement age, with devastating effects on the Romanians' future incomes, the capital market, the entire financial sector and the Romanian economy as a whole, the Privately Managed Pensions Association in Romania (APAPR) shows in a press release sent to AGERPRES on Wednesday.