Romanian Labor Min Says Pvt Pension Funds Should Take Higher Investment Risks

Romanian private pension funds should take more risks, Labor Minsiter Ioan Botis said Thursday at the Mediafax Talks about Private Pensions conference, adding different risk levels would ensure a more efficient asset management.

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He said private pension funds should work with three risk levels - low, medium and high - but the bulk of assets are invested in state papers, which are low-risk.

"I wish we had this type of asset management. It would be more efficient and the benefits can be considerable. This is a great challenge for funds on Pillar II (mandatory private pensions). Currently, up to 70% of these funds invest in state papers, where risks are low," Botis said.

He explained pension funds should give clients the option of choosing the type of risk they wish to take on, adding the Labor Ministry will work on a proposition in this respect.

Private pension industry representatives agreed risks should be diversified and Crinu Andanut, head of Allianz-Tiriac Pensii Private and the Romanian Association for Private Pensions consider this a priority. Adanut said Romanians need to be educated about investments.

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