contributions were collected from some 3.7 million contributors, out of a total of 4.3 million that became members of such a fund.
The system was commissioned in 2007, but the first contributions were collected in 2008. On May 20, 2008, the National Pension House (CNP) paid out the first share of the contributions into the accounts of the mandatory private pension funds, for 3.2 million employees.
There are currently 14 funds operating on the mandatory private pension market, as four funds initially opting to join the system – Marfin, MKB Romexterra, Zepter and AG2R – asked the Private Pension Overseeing Board (CSSPP) to withdraw their business authorization.
As of end-August, the mandatory private pension funds had invested 60% of the assets under their management in Government securities and municipal bonds, 18.2% in bank deposits, 17.2% in corporate securities, 4.2% in shares and 0.4% in mutual funds.
„The trustees acted cautiously this August, reducing exposure to shares to 4.2%, from 5.66% one month before, thus reaching a minimal exposure level. This way, the funds have avoided the negative effects of the world financial crisis and managed to preserve the value of their contributors’ funds,” says CSSPP.
The introduction of the mandatory private pension funds is said to have revolutionised the pension system of Romania, as each employer now has an individual account and their money gets invested. The system previously in use would only use the contributions from the employees to pay out pensions.