The legislation regulating mandatory private pension system stipulates that contributions should increase gradually. The first rise was scheduled to take place in February 2009.
“All measures that I see have an impact on taxation. This is why I am somewhat skeptical about seeing something spectacular happen. For example, a measure that could stimulate the optional pension sector would be to increase deductibility,” according to a statement for Business Standard by Radu Craciun, Investment Manager of Interamerican Pensii, a pension fund management company. The current level tax deductibility for pension fund contributions is an annual €400, for both employees and employers, which is “relatively low compared to other countries,” according to Craciun.
As far as Pillar II is concerned, players are expecting contributions to drop, due to the economic crisis, which is affecting the labor market with layoffs or lower salaries. In such circumstances, not increasing the Pillar II contribution is a “low blow” for the private pension system, Craciun added.
