Civil Society Organizations Propose Minimum Guaranteed Yield For Prv Pensions

"Administrators of mandatory private pension funds should cover this guarantee, and the state should be a last resort option," the organizations said in a statement.

 

The letter is signed by the Group for Applied Economics, the Romanian Academic Society, the Advocacy Academy, the Confederation of Employers in Industry, Services and Commerce, the National Union Bloc and CNS Cartel Alfa.

 

The letter is addressed to the speakers of the two chambers of Parliament, leaders of parliament parties and the head of the private pension system regulator CSSPP.

 

One of the arguments brought fourth by the organizations is that were the contribution not privately managed, the safest saving alternative would be government bonds, followed by bank deposits.

 

"Government bonds and interests for bank deposits cannot be nominally negative, while the yield of pension funds can be. Moreover, yields of government bonds and interests for bank deposits, in market competition conditions, are generally an on the medium term above the inflation rate, therefore positive in real terms (otherwise people would not save money)", the letter reads.

 

The organizations also warn about the “controversial ability” of private pension funds to reach promised yields and the fact that historically, portfolio investments on very long terms, are highly risky.