In the 15 years of operation of the system, Romanians have transferred 16.9 billion euros to level II privately managed pensions, and the profit received by pension funds after the reduction of administrative fees is now 5 billion euros, APAPR, the association representing private funds in Romania, announced on Tuesday .

More than 8 million green envelopes will be received by participants who contribute to non-state pension fundsPhoto: APAPR

In May of this year, Level II of mandatory privately managed pensions reached 15 years of operation (May 20, 2008 – May 22, 2023), during which the total number of members of mandatory private pension funds reached more than 8 million, while net Assets under management exceeded 107.7 billion lei (approximately 21.6 billion euros), which is a historical maximum for the system, the Association reports.

More than 100 thousand Romanians collected more than 1.4 billion lei

Tier II collected a total of 84.2 billion lei (16.9 billion euros) in gross contributions over these 15 years and made total payments of more than 1.4 billion lei for a total of approx. 108 thousand beneficiaries (participants and heirs).

Since the launch of the system, the average annual return on Tier II funds has been 7.41% compared to an average annual inflation rate of 4.38% over the same period.

In monetary terms, the total profit of the pension funds in favor of Romanians, excluding all commissions, is 24.85 billion lei (5 billion euros).

  • “Fifteen years after the launch of mandatory non-state pension provision, in 2023 we see evidence of the sustainability of the system. On the one hand, we have a full recovery of the decline in 2022 caused by negative developments in government securities and stock markets, and on the other hand, a significant acceleration in payouts in the first quarter of this year, which are 58% higher than in the same period last year.” said Mihai Bobocha, APAPR spokesman.

Pillar II has now achieved the lowest level of commissions in its history, extremely competitive even when compared to similar systems.

In 2022, the average annual system-wide commission level was 0.36% of the average annual asset, the value index is calculated in accordance with international practice.