Private pensions raise commissions

Commissions being pocketed by mandatory private pension intermediaries are increasingly handsomely, as the 17 September date approaches when the system will go into effect. Intermediation commissions are up by an average €60-65 from €20-25, for each subscription contract.

Fund administrators offer significant bonuses for extraordinary performances. The minimum level of a commission, regularly given for the first one hundred signed subscriptions, is €30-40 per client. Anyone able to exceed this threshold stands to make €80-90.

There are also administrators on the market who offer the same amount for each subscription, without considering their number. The commission paid by such companies reaches €65. Other players on this market pay the equivalent of €90 in lei for each contract signed once the threshold of 150,000 subscribers is reached.

Mandatory private pensions will employ 150,000-200,000 agents, according to estimates made by the Council of the Commission for the Surveillance of the Private Pension System (CSSPP). All agents, either hired directly by fund administrators or representing brokerage or consultancy companies, will target all employees under the age of 45.

Mandatory private pension funds are estimated to attract 3.4 million employees, of which only 700,000-800,000 subscriptions will be optional. On the intermediation segment, competition will be fierce as the subscription period is valid for only four months. Following that time, subscription papers will be verified and validated, and those who should have entered the system but did not will be randomly assigned to various funds.  Sources on the brokerage market said that administrators will pay commissions to intermediaries for each subscriber obtained by way of this distribution method. The allocation process will consider the number of subscribers attracted by each fund at that time.