CSSPP prepares proposal to increase contributions to mandatory private pensions by 1% per year
CSSPP, Romania's pensions regulator, is preparing a proposal to
increase the level of contributions paid into the mandatory private
pension system (2nd pillar) from half a percentage point per year to a
percentage point per year, making the level of contributions reach 6%
in 2012, not in 2016, as required by current legislation, market
sources told www.privatepensions.ro. Accelerating the increase in
contributions will help increase the assets of pension funds and will
give participants the opportunity of more consistent private pensions.
Under current legislation, the level of contributions transferred to the mandatory private pension funds should increase from 2% of gross income in 2008 with half a percentage point per year up to 6% of gross income in 2016. CSSPP will propose an increase with one percentage point per year, so that the contributions of 6% are to be reached in 2012. But the pace of growth of contributions is included in the mandatory private pensions law, which is why the amendment can be done only by the Romanian Parliament.
Most likely, because the current Parliament has not much time left, considering the general elections coming this autumn, the proposal will be made towards the future Legislature, the same sources have estimated.
In fact, the president of CSSPP, Mircea OANCEA, already raised this issue on various occasions, but without indicating the precise rhythm to increase the contributions. So we'll just have to see when and how this proposal will be materialized.
