Romania’s mandatory private pension system delivered record-breaking results in 2025, with Pillar II funds posting their strongest annual performance since the system’s launch almost 18 years ago.

The seven Pillar II pension funds achieved an average annual return of 19.2 per cent in 2025, according to APAPR calculations, marking a historic high for the system.

Net assets under management rose to 201.6bn lei (€39.5bn) by the end of the year, up more than 33 per cent compared with the end of 2024 and the highest level ever recorded.

The strong performance was supported by robust gains on the Bucharest Stock Exchange, where Pillar II funds invest around a quarter of their assets, alongside improved valuations of Romanian government bonds, which account for nearly two-thirds of portfolios.

In total, around 94 per cent of Pillar II assets are invested domestically, underlining the sector’s role as Romania’s largest institutional investor and a key source of long-term financing for public debt and listed companies.

At the end of 2025, 8.4 million Romanians were enrolled in Pillar II, representing the majority of the country’s active population.

Indeed, more than half - around 4.6 million people - contribute regularly each month, with 4.75 per cent of gross income redirected to Pillar II from the overall 25 per cent social security contribution.

The assets accumulated in Pillar II now equate to 10.5 per cent of Romania’s GDP, making private pensions the second most valuable financial asset held by households after bank deposits.

APAPR data shows that more than a third of total assets, some 75.4bn lei (€14.8bn), represents net investment gains generated since the system’s inception, on top of contributions received.

Over the full period from 2008 to 2025, Pillar II funds have delivered an average annual return of 8.3 per cent, comfortably exceeding average annual inflation of 4.7 per cent.

Meanwhile, for individual savers, the growth has been significant.

A Romanian earning the average salary and contributing consistently since the start of Pillar II now holds around 55,662 lei in their personal account, double the level of three years ago and almost seven times higher than a decade ago.

Of this total, around 64 per cent comes from contributions and 36 per cent from investment returns.

APAPR estimates that 1.1 million participants now have more than 50,000 lei accumulated in their accounts.

Pillar II has also entered a more mature phase of benefit payments.

Since 2008, funds have made around 300,000 payments to participants and heirs, totalling 5.9bn lei.

In 2025 alone, payments reached 2.65bn lei, more than double the amount paid in 2024, with 88,000 beneficiaries receiving funds.

Current legislation, which remains in force throughout 2026, allows benefits to be taken either as a lump sum or as equal monthly instalments over a maximum of five years.

A new pensions payment law is due to take effect from January 2027.

Alongside record investment returns, engagement with private pensions also increased sharply during the year.

More than 1.5 million participants now have online access to their Pillar II accounts through fund administrator portals, while over one million people visited pilonul2.ro in 2025 to check which fund they contribute to, open online accounts, or learn more about the private pension system.

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