Minimum pension fund yield bill not welcomed

The bill to introduce a minimum guaranteed yield equal to the annual rate of inflation for mandatory private pension funds (pillar II) has already received negative response three times before being debated by the Senate plenum, says Aron Popa, chairman of the Senate’s Budget-Finance Committee. “The law draft in question received a negative report by the Labour and Social Security Committee, a negative response from the Human Rights Committee and a negative opinion from the Government before that. The next step is debate by the Senate plenum, which can happen in two weeks at the most,” Aron Popa explained. The law draft as submitted to the Senate in December 2007 is an attempt to bind the mandatory pension funds to generate yields above annual inflation. The supporters of the bill said future private pensioners might get less money (in real terms) than deposited, unless the funds outperform inflation. On the other hand, most of the 18 mandatory private pension funds stated they were against it, arguing it would lead to a very conservative allocation of investments (to comply with the higher-than-inflation yield requirement) and to missing opportunities to invest and increase the assets of pension funds.