First impressions and influences over the present
To Besim Jawad (photo), general manager of Eureko Pensii, the first contact with the local pillar II system in Romania took place in September 2007.
“There were many things needed to be done at that time, but the marketr was headed in the good direction. Nowadays, a broad view over the pension system shows it is functional, it is running. And at that time, nobody had the certainty of its serviceability, or that it would be successful”, said Jawad.
Some of the first impressions that Phil Jones had after his first contact with the local pension market in August 2007 remained unchanged. “We are still witnessing changes in the regulatory framework and unfortunately, some are not in favor of the market players. I am referring to the postponement of increase in contributions. We hope this is only a (very) short term measure, and the market will eventually take up the initial calendar”, says Jones.
In his first interview to a Romanian newspaper, Fabien Lecoq, general manager BRD Pensii, who had arrived in Romania in June 2007, right before the Pillar-II pension plan took its first steps, tells Wall-Street that his first impression was of the fierce competition between administrators. “At that time, Romania, both on TV and in the streets, was jammed with administrators’ commercials, preparing the ground for the first enrollment of participants to private pension funds, which marked the takeoff of the market”, says Lecoq.
“Romanian private pension system is still at infancy and started operating only few months before a major global crisis took hold. But if you look at the market today, the general view is positive: all funds perform well”, Lecoq adds.
Aspects of the local pillar-II pension system
The Romanian private funded pension plan is different compared to other countries, especially developed countries, by its poor offer of financial products and narrow fiscal incentives, primarily in case of pillar III pension system. However, Romanian private pension fund managers scored a combined 7% return in first half, equivalent to a 14% yearly performance, thus remaining the best performing market in the region.
“I would say that the primary gap between Romania and the rest of CEE countries is the infancy. In Romania, the first contributions were collected by funds almost one year ago. The market is in full maturing process”, head of BRD stresses.
The second major difference, Fabien Lecoq continued, is the confining regulatory environment, which inhibits administrators’ freedom of action, and leads to similarities between investment schemes, where funds are almost identical.
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