Private pension funds to be introduced at start of 2006

The first private pension funds are likely to emerge in the first quarter of next year, says Mihai Seitan, chairman of the National Pensions and Other Social Security Rights Office (CNPAS), given that the new law on occupational pensions is to come into effect as of January 1, 2006. The law is currently suspended and pending modification in order to make it more attractive to investors.

Detailed norms for the new law will be drawn up by the newly established Private Pension System Surveillance Commission, which has set a deadline for this task at end of the year.

The Private Pension System Surveillance System was set up through an emergency ordinance adopted during Thursday”s session of government. It will come into effect “quite shortly”, immediately after publication in the Official Gazette, Seitan said.

“The Commission is obliged to finalise regulations and train its people by the end of this year,” he added.

Seitan believes that until Parliament appoints a chairman and the members of the management board, the Private Pension System Surveillance Commission will operate with an interim director proposed by the prime minister.

The Council will comprise five members, who can only be reinvested once, and each term will last five years.

For the time being no name has been forwarded for the position of interim director or that of chairman.

“We haven”t thought about it yet, but there”s enough time,” the CNPAS chairman said.

The new commission will start with at least 20 people, and will eventually have 80-90 employees, including lawyers and actuaries. In terms of specialised training, attention will fall on private pension surveillance.

Private pension surveillance specialists will be “mainly trained abroad”, says Seitan, in countries that already have commissions, such as Poland or Hungary.

“Until it becomes independent, that is until it functions on the basis of taxes received from companies that manage private pension funds, the Commission will be financed through a loan from the World Bank,” he explained.

The law on occupational pensions, using the formula it was published in last year, was thought impossible to endorse and was suspended. ioana.leaua@zf.ro