Pillar II, Romania’s mandatory private pension fund system, will become optional, labor minister Lia Olguta Vasilescu said, according to Romanian news agency Mediafax.
Vasilescu said the citizens would be notified about the changes to the Pillar II system this summer.
“We will not nationalize it but we will explain very clearly to all those who are contributing to Pillar II how much their pension will be, because people have expectations,” Mediafax reported Vasilescu saying on Romanian TV. “A portion of the contribution from pension Pillar I is taken to ensure this pension on Pillar II. So, there are many things that we have to explain to people.”
Vasilescu also said that she discovered that she had been paying contributions to the Pillar II for 10 years without knowing it because she had never received a notification.
“Given that the law says very clearly that every year you have to notify the policyholder on the number and value of the fund units, I was absolutely convinced, for 10 years, that I am not a contributor,” said Vasilescu. “I want to choose. I want to have this opportunity and I think anyone should have this right.”
Last week, Romania’s stock market was sent tumbling to its lowest point in 12 months after a government website accidentally published a proposal to suspend payments to Pillar II. The Pillar II pension funds had 6.9 billion lei ($1.73 billion) invested on the Romanian stock market as of December 2017.
The pension Pillar II had funds of more than EUR8.5 billion ($9.9 billion) at the end of 2017, according to the Financial Supervision Authority (ASF).