Is the Romanian mandatory private pension fund system collapsing? The ruling coalition insists on the “no”. The system, also known as Pillar II will not be abolished by the government and ruling coalition said both the Social Democratic Party (PSD) leader Liviu Dragnea and the prime minister Viorica Dancila on Monday.
“The information that the Government planned to suspend contributions to private pension funds in the second half of this year appeared in an official document by mistake, according to Ion Ghizdeanu, president of the National Strategy and Prognosis Commission (CNSP) …. this was only an internal work scenario that should have never appeared in an official document”, Ghizdeanu stressed, as reported by romania-insider.com.
Indeed, there was internal debate on how the private fund system would be cash-injected, with the government’s legislative agenda reading that contributions could be suspended between July and December 2018, however, nothing has been decided yet. There is speculation around a possible “new contribution system that would be paid by both the employees and employers from the income or profit tax.”
Romanian society seems to disapprove of the possible measure. “Business organisations signed a letter asking the ruling coalition not to change the architecture of the local pension system as this would have negative social and economic consequences.”
Liviu Dragnea clarified there is not intention of ‘touching’ the mandatory private pension funds and “asked the media and other parties not to ‘roll out false information’.”…. / IBNA