Romanian government approves mandatory schemes
ROMANIA – The recently elected Romanian government has decided in favour of the creation of a multi-pillar social security system – named the Universal Pension Funds Law - which will see the genesis in October 2002 of mandatory capitalised pension schemes administered by the private sector.
Only last month, the new government postponed the reform that had been put in place by the outgoing administration.
The new government action plan for pension reform between 2001-2004, spells out the framework under which the obligatory schemes will be created.
According to the plan, the second pillar mandatory schemes will be administered by the private sector and a new supervisory institution will be formed to govern their actions.
The timetable for the implementation of the schemes envisages the setting up of prudential rules as well as the regulation governing asset administrators, depositories and annuity providers by the end of the second quarter 2003.
A financial plan for covering deficit during the initial years of the new pension funds will arrive in the third quarter of the same year.
Negotiations with international financial institutions for supporting the system will start by the end of 2002, the program shows.
A draft law for adopting optional supplementary pension schemes will be drawn in the next couple of years, according to the plan.