Mandatory private pensions, the so-called second pylon of the pension legislation, are endangered by the system for redirecting funds from the state pension budget to companies administering such moneys, according to Omniasig Pensii Director, Cristina Ni¡escu. Although the technical solution has been identified, it has not yet been applied, she told Business Standard. The new pension legislation, passed last year, is meant to redirect part of state pensions to the private sector. Thus, a portion of mandatory employee contributions to the state pension system is to be transferred to private administrators, as of 2008. By the end of 2007, employees under the age of 35 must choose a company to administer their mandatory private pensions. Ni¡escu told Business Standard that mandatory private pensions will not be delayed, and that if the Economy Ministry and the National Agency for Fiscal Administration (ANAF) do not come up with the technical support in due time, companies administering pensions will take charge of the transfer process. This will mean higher fund administration costs, to be supported by taxpayers.
The former head of the National House of Pensions and Other Social Insurance Rights (CNPAS), Mihai ªeitan, told Business Standard that work on the system to transfer funds from the state to private companies should have started months ago. “They need an IT company, because I am not sure that the Ministry of Economy and ANAF can apply the technical solution, money is needed, people are needed,” he said. Furthermore, if the state does not collect all funds from employees, then employers will have an added burden of making payments to both the Social Insurance Contributions (CAS) and private funds. “I hope this does not happen, however,” ªeitan added.
CNPAS has a database of taxpayers and their social contributions. ANAF is supposed to take part of the money paid by employees to the state and transfer this to the private system. However, without a technical solution for the transfer of funds, the money might not reach private administrators.
