Pension Funds Outperform Inflation Rate

Both the privately managed mandatory pension funds (Pillar II) and the optional pension funds (Pillar III) have rendered annualized return rates above the inflation rate, ever since they became operational, according to a report by the Association of Privately Managed Pension Funds in Romania (APAPR).

The overall value of all the net assets managed by the private pension funds operating in Romania reached 2.17 billion RON at the end of September. Privately managed mandatory pension funds accounted for 1.99 billion RON of that value.

Pillar II totalled some 4.84 million participants at the end of September, including 4.46 million participants who have made at least one monthly payment to their private pension account, either directly or through their employer.

"The net value of managed assets reached nearly 1.99 billion RON in the given interval (i.e. January - September 2009), following the collection of 17 rounds of payments in the total amount of 1.82 billion RON. The difference between the gross payments and net assets is given by the net profit made so far by the private pension funds on Pillar II for their participants, which is nearly 169 million RON," reads a press release from the Association of Privately Managed Pension Funds in Romania (APAPR).

Optional private pension funds (Pillar III) reported nearly 179,000 participants and net assets of 172.6 million RON at the end of September 2009.

Pillar II private pension funds generated an average return of 13.61 per cent for the first nine months of the year and 17.4 per cent for the past twelve months. The average annualized return rate of all the privately managed mandatory pension funds is 15 per cent since the date of establishment.

Optional pension funds generated an average return rate of 12.97 per cent for the first nine months of the year and 13.18 per cent for the past twelve months, as opposed to an inflation rate of 4.94 per cent. The average annualized return rate of all the optional private pension funds is 7.62 per cent since the date of establishment.