Mandatory private pensions, under scrutiny

They argue regulations in the system are being changed due to pressures from the trade unions aiming to control a slice of this market, according to sources on the market for Business Standard.

Representatives of the Commission Supervising the Private Pensions System (CSSPP) were summoned at the end of last week to the Labor Ministry, where they met Minister Paul Pacuraru. Following this meeting, rules regarding mandatory allocation were changed. Employees under 35 are compelled to subscribe to a mandatory private pension fund. Those who fail to subscribe by January 17 will be randomly allocated to the pension funds.

Prior to last week's meeting, it was established that the random distribution will be made proportionally, based on the market share secured by each fund during the subscription campaign. However, Pacuraru and CSSPP representatives decided that each of the 18 pension funds administrators will be allocated an equal number of subscribers.

"The decision was made following requests of the trade unions," CSSPP's Vice-president, Ion Giurescu, told Business Standard.

Several NGOs and two trade unions recently asked the Government, the Predident, the Parliament, the main parties and the CSSPP to change the legislation on mandatory private pensions. They said the law should stipulate that pension funds should have a minimum guaranteed yield, at the same level as the annual inflation rate.