The average return of Romania’s optional private pension funds (Pillar III) has outpaced inflation over the past 18 years, delivering 6.1 per cent annually compared to an average inflation rate of 4.6 per cent, according to data from the Association for Privately Administered Pensions in Romania (APAPR).

The research showed that approximately 900,000 Romanians have opted to save for optional private pensions under Pillar III, while approximately 96,000 have already received their money from this system.

The research indicated that by the end of May 2025, the 10 Pillar III private pension funds managed approximately RON 6.1bn in assets under management.

The 10 funds received gross contributions totalling RON 5.2bn and paid out over RON 850m to beneficiaries, resulting in a net investment gain of nearly RON 1.7bn.

APAPR stated that it is “unfortunate” that the limit on deductibility for contributions to Pillar III, which remains at €400 for both employees and employers, has not been adjusted since January 1, 2009. During this time, the average gross salary in the economy has risen by 4.5 times.

To increase the attractiveness of Pillar III, APAPR has proposed raising the tax deductibility limit to match two months of minimum gross monthly income per annum, reflecting the increase in the population's income in the last 16 years.

APAPR president, Radu Crăciun, said: "In the last 3-4 years, Romanians' interest in optional pensions has increased substantially, which is reflected in the record number of those who start contributing to Pillar III.

“These developments, based on the increase in the population's disposable income, but also in the confidence in private pensions in general, could be further stimulated by the increase in tax deductibility, in order to reduce the pressures on the public pension system in the long term."

APAPR said together with Pillar II of mandatory private pensions, Pillar III represents the “most efficient” long-term savings solution for the Romanian population.

It said that this is because pension funds typically have a lower risk profile, maintain competitive operating costs, deliver positive real returns, and can help boost the economy through the investments made by private pension fund managers.

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