Romania introduces second-pillar pension scheme
ROMANIA - The parliament of Romania has introduced second-pillar pensions legislation - but potential providers have expressed doubts over its implementation.
ING Romania director Bram Boon said the legislation had come as "a real surprise - but it's good news. It's made me optimistic again".
However, the implementation of mandatory schemes is likely to be some way off. Byelaws covering licensing of pensions providers and investment rules will need to be introduced first. In addition, many providers are less bullish about the prospects for collecting contributions.
"The collection system is still an issue - and not a simple one," said Boon. "The government has a project to address it but, knowing Romania, you could find the pensions system starting with no IT system to collect it in place. If that happens, it will be a big mess."
Mihai Seitan, president of National Pensions House and secretary of state at the labour ministry, said he expected "no significant delay" in the system's introduction. "My own optimistic view is that we'll see it possibly before October or November this year," he said.
Yet he agreed that the collection of contributions remained a potential obstacle. "We have the database but we don't have real money yet and no real system to ensure that what companies have declared they've paid they've actually paid.
"We're halfway there. At least we know what they've declared," he said.
Participation in the much smaller third-pillar market has been slow. Initial expectations were that life insurers would establish themselves in the third-pillar market with an eye to breaking into second-pillar provision.
To date only one insurer, BCR Asigurari de Viata, has applied to the regulator for a licence to manage a third-pillar pension fund. The president of that fund, Florina Vizinteanu, told local journalists the firm would wait to see how the new legislation panned out before applying for a second-pillar licence.