Increase in voluntary pensions deduction not enough, companies say

The increase in the maximum deduction for contributions paid to voluntary pension funds (the 3rd pillar) is a big step ahead, but there is still a lot of room for growth, according to managers on the private pensions market. According to a Government project, the deductibility threshold for contributions is set to rise from 400 euros to 500 euros per year in cumulated sum, for the employee and the employer. Moreover, voluntary pension fund contributions will also be exempt from paying social security. “There is a big difference between what we want and what can be achieved. We want a higher deduction, which would stimulate saving and would lead to a rise of the private pensions market, because to stimulate savings is the only long-term solution to change Romanians’ consumption behaviour. On the other hand, I think a higher deduction threshold than the one proposed by the Government cannot be applied at present due to its budgetary impact, but the intention is good, because a signal has been given,” says Crinu Andanut, general manager of Allianz-Tiriac Pensii Private, and chairman of the Privately Managed Pensions Association in Romania (APAPR).