ROMANIA - Pension funds in the Romanian mandatory second pillar returned 13.3% for the first nine months, according to the pension fund association APAPR.
While returns are on their way to match those of 2009 (17.7%), inflation estimated at 6% for the first three quarters of this year also has to be taken into account, the APAPR said.
Since inception in 2008, the mandatory second pillar has managed an annualised average return of 16.2%, also due to a good start in May 2008, with an 11.5% annualised performance for that year.
Crinu Andanut, chairman of the APAPR, said: “In spite of the prolonged recession and adverse conditions on the financial markets, Romanian pension funds continued to invest prudently and profitably, consolidating their positive returns.”
The Romanian government, in a letter to the IMF, has renewed its promise to increase its contributions to the second pillar from next year.
This measure is part of a pension reform that has now passed parliament and will see the pension age rise from 63 years to 65 for both men and women over the coming decades.
Further, pension indexation will gradually be shifted from wage-linked to inflation-linked and tighten eligibility for early retirement, as well as disability pensions.
The reform is expected to save 3% of GDP in the long term.