138,000 new entrants in Romanian mandatory private pension funds in August
Over 138,000 new employees joined the Romanian mandatory private
pension funds (2nd pillar) during August, raising the total to over 4.3
million future private pensions recipients, data published today by
CNPAS shows. The 138,000 new participants entered the market through
the first periodical (monthly lottery) in the continuous enrollment
procedure - that means, they did not sign an adhesion, but were
obligated by the law to enter the system and CNPAS organized a lottery
to redistribute them proportionally among the 14 funds on the market.
During January - August, the first period of continuous enrollment,
only 16,500 participants opted-in by themselves, i.e. by signing an
adhesion, so the number of 138,000 who joined by lottery is
unexpectedly large.
According to Romanian legislation, all employees under 35 years old who entered the labour market starting from 18 of January this year have to join a mandatory pension fund during a 4 month period. After this period, CNPAS will organize monthly lotteries to include the employees not having joined. The lottery redistributes the participants among the funds on a proportional basis, that means all funds' market shares by participants stay intact.
After this first lottery, the total number of participants to Romania's mandatory pension funds reached 4,311,070. ING, the largest fund on the Romanian market, reached 1.43 million participants (33.2% market share), ALLIANZ-TIRIAC reached 1.1 million participants (25.6%), and GENERALI reached 400,000 participants (9.4%).
The big number of participants who entered the system by lottery has a good and a bad side. The bad part is that this denotes low interest and information among participants regarding the mandatory private pension system, while the good part is that the number of empty accounts (with no contributions paid) in the case of the new entrants are likely to be almost zero.
19.08.2008
