As the situation is not covered by the legislation in force, the Supervisory Commission of the Private Pension System (CSSPP) issued a ruling on the payment means – through single amount, same as in case of disability and death. The ruling can be found on CSSPP website.
The first beneficiary of the mandatory funded pension scheme in Romania retired at relatively early age. He worked under difficult conditions and retired from the public system with complete contribution plan.
He paid regular contributions to Pillar II, receiving on Friday, February 20, the lump-sum payout from the private pension scheme. The payment was made by an administrator, member of APAPR.
According to APAPR, the amount paid out was not sky high, being calculated at the contributions paid in only few months.
Also, the situation is however iconic, as it sheds light around the most unhealthy myth on the second pillar and on private pension system in general: “the pension funds are some black boxes you fill with money for 20-30 years and you have no guarantee or certainty you will get them back”. The fact that private pension scheme in Romania has already started to make the payouts is belying this myth.
Within the next ten years, the mandatory funded pension scheme in Romania will have to make payouts to 80,000 – 100,000 beneficiaries - the solvency of the pension funds will be certified by each of these 100,000 future recipients of Pillar II retirement benefits. “In other words, the payout of private pension benefits begins today, and not 20-30 years later. The private pension scheme in Romania is running transparently and will make all the payout required, this fact being “tested” by nearly 100,000 times in the next ten years”, said the representatives of APAPR.
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Romania’s situation is not exception to regional practice. Hungary was the first country in Central and Eastern Europe that adopted both Pillar II scheme in 1998 and third pillar of voluntary private funded accounts in 1999.
In Hungary, the Pillar II entity paid out 23 million euro in first ten years to approximately 60,000 active members. Moreover, the Hungarian Pillar III scheme paid nearly 946 million euros in 15 years of functioning to 360,000 members.
Poland was the second country in the region that introduced the Pillar II system (after Hungary), in 1999. In first ten years the second-tiered entity paid out roughly 290 million euro to few hundred thousand active members.
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