Simulation: Mandatory pension funds might collect EUR 23.5 billion worth of contributions by 2020
The mandatory private pension funds might collect total gross contributions of EUR 23.5 billion by the end of 2020, according to an estimative analysis of the portal www.privatepensions.ro, based on the data from the long term forecast bulletin of the National Forecast Commission (CNP). From a EUR 202 million-volume collected as contributions this year, funds might reach annual inflows of EUR 3.65 billion by 2020.
The simulation is done based on data published in the long term forecast of CNP for 2020: a gross salary (as basis for calculation for the social contributions to pension) amounting to EUR 1,288 and almost 6.17 million employees in the economy - out of which 5.5 million are participants to the mandatory pension system, but only 4.73 million contribute to the relevant accounts.
How much or how little does EUR 23.5 million mean for 11 years of operation in the mandatory private pension system? To compare, the relevant Polish market that started off in 1999 has assets (not just contributions) amounting now to over EUR 40.1 billion, being the largest pillar II market in Central and Eastern Europe. On the other hand, the Bulgarian market that started in 2002 has only recently exceeded the EUR 1 billion threshold, at the end of last year, a step that the Romanian market will take only in 2010. But in Western Europe, some states have already private pension reserves amounting to tens or even hundreds of billions of euros.
As mandatory private pension funds collect more money in their clients’ accounts, they become the most important investment instruments in the economy and on the financial markets.
