Mandatory private pensions await Government's verdict

At the end of last week, the main trade union confederations asked the government to postpone the initiation of the program until after CSSPP organizes a national campaign to inform people about the need for such a system.

In the document sent to the Executive, trade unions clearly require that the collecting of contributions be postponed until after the National Agency for Fiscal Administration (ANAF) and the National House of Pensions and Other Social Insurance Rights (CNPAS) demonstrate that they have finalized the IT system for identifying and keeping track of subscribers to the private pension system.

"As far as collecting is concerned, we will not agree to start this process unless we are certain that the IT systems of CNPAS and ANAF are functional, so that the payments made by subscribers are not lost," Petre Dandea, Vice President of the National Trade Union Confederation Cartel Alfa told Business Standard.

Employees over the age of 35 will still be able to choose the fund that will receive a two percent share of their contribution to social insurances by mid-January 2008. After that date, a month will be reserved for checking documentation, and employees who have not complied with the maturity date will automatically be assigned to funds on the market.

State campaigns conducted in countries throughout the region have targeted not only informing people, but especially helping them to understand and accept the necessity for reform in the pension system.

"The fact that the information campaign did not take place sooner was a big mistake. In fact, unions have well understood that information is merely a first step. In order to have broad support from the population, it needs to be aware of the importance of the private pension system," analyst Constantin Nastase told Business Standard. He believes that problems raised by trade unions can be solved "as we go along", without requiring the postponement of the program for several months. "The information campaign will involve some 100,000-150,000 marketing agents, who will sell mandatory private pension products for authorized funds," said Radu Vasilescu, Pension Manager of ING Life Insu­rance.