The combined assets of Pillar II and Pillar III pension funds reached a share of 8.5% of GDP in December 2023.
Pillar II, i.e. the system of privately managed mandatory pensions, represents 96% of the value of these assets, while Pillar III, of optional private pensions, only 4%.
In both cases, the weighted average rate of return of the pension funds was in the last two years (2023 and 2022) far from the annual rate of inflation.
Pillar II
The private pensions market in Romania reached, at the end of 2023, total assets worth 131.5 billion lei, an increase of 31.4% compared to the end of the previous year, according to an ASF release.
Within Pillar II, of privately administered state pensions, the total value of pension fund assets was 126.74 billion lei, on December 31, 2023, up by approximately 31.4% compared to the same date in 2022.
It should be noted that the assets of the pension funds on Pillar II represent 96% of the assets of the private pension system, Pillar III, which is optional, coming in with only 4%.
The number of participants registered in the Pillar II system was 8.15 million people at the end of 2023, compared to 7.96 million people at the end of the previous year.
During 2023, the contributions transferred to the privately managed pension system were in the amount of 12.82 billion lei, an increase of approximately 17% compared to the previous year.
The weighted average rate of return of all privately managed pension funds was 7.39% in December 2023, up from the end of 2022 when it was 4.13%.
However, it should be noted that, according to the INS, the annual inflation rate was 10.4% in 2023 and 13.8% in 2022, the average profitability of Pillar II funds being therefore far from the depreciation of the national currency.
Pillar III
On Pillar III, of optional private pensions, the total value of assets was 4.75 billion lei at the end of December 2023, up by approximately 31% compared to the same period of the previous year.
The number of participants registered in the voluntary pension system, on December 31, 2023, was 710,777 people, up 13% compared to the same period of 2022.
The average contribution of the participants, with contributions transferred on December 31, 2023, was approximately 168 lei/participant, a level similar to that recorded in the same period of the previous year.
During 2023, the contributions transferred to the voluntary pension system amounted to approximately 601 million lei, up 20% compared to the same period in 2022.
The weighted average rate of return of all optional high-risk pension funds was 7.24% in December 2023, while the weighted average rate of return of all optional pension funds with medium risk was 7.24% in December 2023. 5.87%.
Article made in collaboration with Risco.ro
