Private Pensions Ready for Launch

Ziarul Financiar

Romania

April 5, 2007
 

The launch of optional private pensions (the 3rd pillar) is fast approaching, with the first contributions being collected in May and the collection of compulsory private pensions (the second pillar) beginning in August. The launch of optional private pensions is expected to result in the chase for companies to attract the 2.5-3.5 million clients available - such was the conclusion of the seminar entitled "Private pensions, the second salary for 2 million employees," organised by Ziarul Financiar and ING Asigurari de Viata (ING Life Insurance). "Currently, optional pensions (the 3rd pillar) are very close to collecting their first contributions from the system.

One company is already authorised to manage such pensions and another three are in advanced talks to become authorised," stated Mircea Oancea, president of the Commission Supervising Private Pensions (CSSPP). Compulsory pensions (the 2nd pillar) will also make their debut in August, once they attract their first clients, he specified. Bram Boon, general manager of ING Asigurari de Viata believes that the four-month period, between August and November when the employees have to decide on a fund, will result in a hectic chase on the market. "In these four months, 2.5 to 3.5 million employees will have to choose a compulsory pension fund, so 100,000 marketing agents will try to attract them into the system," says Boon. After the four months are over, those who did not make their pension choice will be evenly distributed at random to the companies within the system. Consequently the companies that will gather the most contributors in the 2nd pillar will, as a result of the "redistribution lottery," see a significant increase in client numbers.