The annual return on pillar II compulsory private pensions in Romania has averaged 7.16 per cent a year since its introduction (May 2008 – 31 December 2022), according to analysis by APAPR.

By comparison, the average annual inflation rate was 4.19 per cent over the same period.

During the period of its operation, pension funds in pillar II made payments totalling more than RON 1.1bn to 88,202 participants and beneficiaries.

Total assets managed by pillar II pension funds reached RON 96.4bn at the end of 2022, a historic high for the system.

APAPR also revealed that gross contributions amounting to RON 79bn have been transferred to pillar II since it was introduced.

The difference between the current net assets and the gross contributions, adjusted with payouts already made, represents a gain for participants of RON 18.5bn.

On average, Romanian pillar II pension savers contributed RON 22,406 to their pillar II pension.

The average net profit for individuals was RON 5,900, while the average net profit updated only with the inflation rate was RON 2,604.

“The financial gain obtained by Romanians from Pillar II of compulsory private pensions is more than double compared to updating the gross contributions only with the inflation rate, for the entire period of almost 15 years of operation of this system,” APAPR stated.

“Also, the yield of Pillar II exceeded both bank deposits in lei and the accumulation of euros, making private pensions the most effective form of long-term savings among all those accessible to the population, despite the numerous economic crises and fluctuations on the financial markets from the last 15 years.”

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