Private pension funds in Romania delivered strong returns for 2009, according to data released by the Romanian Pension Funds' Association (APAPR).

Second pillar pension funds (mandatory), which manage the savings of 4.55 million participants, averaged a net return of 17.7 per cent for 2009, an improvement on 2008's 11.5 per cent. Net assets at the end of 2009 hit around €565million.

Third pillar (voluntary) pension funds, which serve around 185,000 participants, registered a weighted average return of 15.9 per cent for 2009, compared to a meagre 2.7 per cent in 2008.

Government bonds delivered investors ten to 11 per cent returns during 2009, deposit interest rates averaged 12 to 13 per cent, and inflation at the end of 2009 was estimated at between four and five per cent.

In total, pension assets of Romanian pension funds reached an estimated €613million, a figure 2.7 times larger than at the end of 2008.

Crinu Andanut, chairman of APAPR, commented: "Our pension funds' results remained strong during this troubling year, as managers achieved a fine risk-return balance in investing the still very low level of assets. Romanian pension funds weathered the storm in solid positive territory and look forward to the no-less-challenging markets of 2010, for which expectations are still mixed between extremes."

2010 will see changes to the mandatory contribution rate for the second pillar funds, raised to 2.5 per cent of participants' gross income from two per cent in 2009. However, this is still lower than the three per cent level that was due according to the initial calendar in the pension reform law.

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