In August, Too, Private Pension Funds Prefer Governmental Securities

The aggregated net assets of the 12 privately managed mandatory pension funds (Pillar II) operating in Romania amounted to 1,850,510,534 RON (438 million EUR) at the end of August, up by 8.5 percent from July and up five times from August 2008, according to the latest report of the Private Pension System Supervisory Commission (CSSPP).

At the end of August 2009, the Pillar II pension system comprised 4,425,382 participants (persons who had made actual contributions to the system since the system kick-off in May 2008), up by 0.8 per cent from July. Compared to August 2008, the total number of participants increased by 19.8 per cent. The growth for the first eight months of 2009 (August 2009 - December 2008) is 9.8 per cent.

The number of participants in the private pension system has been on a constantly upward trend due to the addition of newly employed participants (persons obtaining their first job), who either chose a fund themselves or were randomly allocated by the CSSPP, and the completion of the allocation of persons who had been employed before the implementation of the mandatory private pension system.

The actual monthly payments to the privately managed mandatory pension funds marked a downward trend in the reporting period as a result of currently adverse economy conditions.

In August, too, pension fund management firms continued to invest primarily in low-risk assets in line with the trend noted in 2008 and the first half of 2009: 58.37 per cent of the investments made by Pillar II funds consisted of governmental securities. The level reported for August is higher than the level reported in July and lower than the level reported for September and December 2008. Corporate bonds accounted for 20.46% of the portfolio at the end of August 2009, slightly down from the previous month.

• Optional private pension funds reach 174,885 participants

At the end of August 2009, 174,885 participants were registered with 13 optional private pension funds managed by 10 management firms. The total count was by 0.9% higher than in the previous month and by 40% higher than in August 2008. The overall growth in the number of participants was 16% for the first eight months of the year.

Regarding the origin of the contributions to the optional private pension funds, 56 per cent of the participants had their employers pay for them, 31 per cent of them paid themselves and 13 per cent paid jointly with their employers.

The net value of the assets held by optional private pension funds reached 161,278,145 RON (38 million EUR) at the end of August 2009, up by 7.1 per cent from the previous month, up 300 per cent from August 2008 and up 90 per cent from December 2008.

Governmental securities accounted for 59.49 per cent of the overall investment portfolio of the optional private pension funds at the end of August 2009, slightly down from the previous month.