CSSPP: Contributions to Pillar II should reach 6% within 4 years instead of 8

The increase of contributions to second pillar private pension scheme, which was canceled in 2009 will have to be resumed soon after the soundness in the economic system takes hold, so as to reach 6% of the gross income within 4 years instead of 8, said the head of the market watchdog, CSSPP.
“In order to make the pension scheme an alternative to financial market, banking system or equity market, I think we need bring back on the agenda the increase of contribution issue, after crisis ends. As of 2010, we plan to bring the level of contributions to 6% of the gross income within four years instead of eight, as it was initially scheduled”, said Mircea Oancea (photo), chairman of Supervisory Commission for the Private Pension scheme.

Earlier this year, the government canceled the raise of the contribution from 2% to 2.5% of the gross income. Under the initial plan, the share should have raised by 0.5% up to 6%. Subscribing to second pillar pension scheme for employees aged below 35 and voluntary scheme for persons aged between 35 and 45.

As Oancea commented, the second-pillar pension scheme in Romania is underdeveloped when compared to that of countries in the region.

In 2007, the assets under management accounted for 0.003% of Gross Domestic Product, and in 2008, they reached 0.2% . In 2007, the system’s assets accounted for 4% of GDP in Czech Republic, 7.7% in Croatia, 11.1% in Hungary and 11.9% in Poland.

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