Companies to take interest in voluntary pensions next year

Companies will be interested in offering voluntary pensions to their employees as part of salary packages as late as next year, as their budgets are not ready to include such products yet.
The market of voluntary pensions will not be able to exploit its full potential this year, due to the lack of interest on the part of companies for these products. With the voluntary pensions programme starting as late as May this year, the companies did not have their budgets ready, so they could offer these products as benefits to their employees.
“Since companies did not know about these voluntary pensions in advance, they did not budget the necessary sums to offer their employees such benefits. Talks we are having with several companies point to the fact that the great majority will be able to buy these products as late as next year,” says Radu Vasilescu, pensions manager at ING Asigurari de Viata (ING Life Insurance).
Although the option whether to buy such a financial product or not is an individual one, the legislation allows employers to offer voluntary pensions to their employees, therefore contributing to the pensions instead of their employees. This year however, the bulk of the voluntary pension sales will not be made on the corporate segment, but through retail, i.e. directly to individual clients, Vasilescu adds.
“Our first voluntary pension sales have been satisfactory, we have almost 4,000 contracts signed. There aren’t that many companies, except for a few small and medium-sized ones, which have bought these products. Few companies had the necessary money in their budget to contribute to these pensions instead of their employees,” says Crinu Andanut, general manager of Allianz Tiriac Pensii Private (Allianz Tiriac Private Pensions).
The voluntary pensions managers have relied a great deal on corporate sales since the programme started in May, but apparently, it is retail sales, which will predominate, says Andanut.
Another reason for which the voluntary pensions market (the 3rd pillar) will perform below its potential is the overlapping with the sales campaign for mandatory pensions (the 2nd pillar), says Radu Vasilescu.
The sales force, made up of individual marketing agents will focus on mandatory pensions, which take precedence, according to the fund managers. “The same person will have to sell two types of private pension products. Under the circumstances, it will be difficult for voluntary pension sales to rise,” says the pensions manager of ING Viata.
Another hurdle precluding a strong rise in voluntary pension sales is the so far unconvincing activity of insurance brokers that are allowed (if authorised by the Private Pensions Commission – CSSPP), to distribute these products.
“Insurance brokers have not yet started to work at full capacity. They have not yet started to promote voluntary pensions to the firms they already have in their portfolio,” says Andanut.

Voluntary private pensions
Companies will be able to offer voluntary pensions to their employees as part of salary benefit packages as late as next year, as their budgets are not ready to include such products yet.
This year, the bulk of voluntary pension sales will not be conducted on the corporate segment, but through direct distribution to clients