Pension leaders to CNPAS: Eliminate the “negative amounts” causing impossible situations!
The top mandatory private pension companies (pillar II) try to persuade the National House for Pensions and Social Security (CNPAS) not to transfer them “negative amounts”, namely orders to diminish the participants’ accounts, starting with the second contribution collection round. The “negative amounts” are actually impossible to manage and create problems not only for administrators, but also for the participants to the fund.
The “negative amounts” are caused by errors in the declarations or in the payment made by the employers, in the first contribution transfer round. If, by mistake, some employers declared or paid more in the account for the pension contributions, and CNPAS also made the transfer in the private pension individual accounts of the respective participants, then in the following month, CNPAS shall send to the respective funds the orders to reduce the amounts from the respective participants’ accounts.
Nevertheless, fund administrators say that the solution cannot be actually implemented, and the transfer of “negative amounts” might block the activity of the private pension funds. The first one to raise the issue was Radu VASILESCU, CEO of ING Pension Fund, the leader on the relevant market, followed by Ioan VREME, CEO of GENERALI Pension Fund, and the third player on the market. In fact, many players from the market were against the negative amounts and urge CNPAS to find another solution to remedy the participants’ situation.
“A solution would be to have CNPAS transfer only the positive amounts”, said Radu VASILESCU. In case of declaration or payment errors, CNPAS should transfer only the net positive amounts to the pension funds and be careful to recover the potential negative amounts from the employer, according to the pension companies.
In fact, the legislation in force does not allow the decrease in the participants’ accounts or the transfer of contributions from the account of one participant to another, as corrective method for incorrect transfers. According to the pension companies, the problem is even more stringent, as the second contribution transfer round shall soon take place, by the 20th of June at the latest.
Even the Private Pension Supervisory Commission (CSSPP) might play a role in solving this problem, if it quickly amended the collection norm to eliminate the possibility of such “negative amounts”, according to certain administrators of the private pension funds.
