The private pension system had a positive evolution in the first quarter of 2019 and the statistical data for the first quarter of 2019 are eminent: 7.79 million participants and 53.21 billion ROL assets under management, increasing 7.28% versus December 2018, representing 5.5% of GDP, said Dan Armeanu, vice-president of the Financial Supervision Authority - Private Pension System Sector.
"A decade after its inception, the private pension system proves the solidity and security of a mature market characterized by a consistent asset value and a critical mass of participants that ensure its long-term stability and sustainability," said Dan Armeanu, in a statement released by ASF on Monday to AGERPRES.
In the first quarter of 2019, 59,800 people were randomly assigned or admitted to a privately managed pension fund, the percentage of people randomly assigned decreasing by about 45% compared to December 2018, indicating an increase in interest in the private pension system. During the same period, 9,445 new participations were admitted to the voluntary pension funds, which indicates a trust in the system and an increased concern for the accumulation of long-term resources to supplement the retirement income, the source quoted.
Between January and June 2019, a total of 215 participants called for the payment to be discontinued and their transfer to the first pension pillar.
"This number is insignificant and reflects the confidence that the private pension system enjoys, in the context of expressing an implicit option in favor of it. Thus, it is confirmed that the vast majority of employees have the need to diversify the source of pension revenues with an accumulation component as an alternative to the public pension system by combining the redistributive system with the accumulation system in order to reduce potential uncertainties related to the level of the pension, "Armeanu explained.
In March 2019, the average value of an account for privately managed pension funds was 7,101 lei up 6.45% compared to December 2019, while the same indicator was 4,788 lei for voluntary pension funds. The amount of the account is determined by the amount of the contribution and the contribution period. Higher average values of Pillar II accounts were recorded among participants in the 35-39 age group, namely 19,677 for men and 18,571 for women.
At the end of the first quarter of 2019, aggregate investment structure was maintained on a conservative line with prudent diversification through government securities investments of 61.30% for Pillar II pension funds and 58.34% for funds Pillar III pensions and share investments of 18.32% and 21.13%, respectively. A further 20% was attributed to other assets: bank deposits, corporate bonds, bonds issued by non-governmental foreign bodies, participation certificates, etc.
"The fact that 92% of Pillar II pension funds assets, ie 88.8% of the assets of the voluntary pension funds were denominated in lei, highlights the contribution and importance of voluntary pension funds to the financing of the local economy, the circumstance of which indirectly benefits participants who contributed to pension funds. In the conditions of maintaining a balanced mix of investments to ensure security, liquidity and moderate to low risk, despite the high volatility recorded by the shares traded on the Bucharest Stock Exchange in the first quarter of 2019, the rate of return of the pension fund Pillar II with a high risk was 2,4785%, while the weighted average rate of return for funds with average risk was 2,8758% in March 2019. In the same reference period, the weighted average rate of return of Pillar III high risk funds was 2.1434%, and those with a medium risk level of 1.599%, " the ASF vice president said.
According to him, in order to maintain a living standard with the one during the active period, every citizen should also consider including participation in a voluntary pension fund for as long as possible.
"Another aspect that concerns us is to implement digital technology both in relation to potential participants for their complete and at any time information, as well as to simplify and improve the internal processes and administrators' activity in order to streamline the functioning of the private pension system " said Dan Armeanu.