Romanian private pension fund assets jump 19% in 2024 on year
Assets held by Romania’s seven mandatory private pension funds jumped 19% on the year to 150.85 billion lei ($31.15 billion) in 2024, with the average yield at 5.74%, slightly above the 5.1% annual inflation rate, the industry association said on Tuesday.
The European Union member state overhauled its communist-era pension system in 2008, making it compulsory for working Romanians under 35 to contribute to a “second pillar” of private pension schemes as well as their state pension.
Roughly 8.3 million Romanians contribute to the seven funds, which are the largest institutional investors on the Bucharest Stock Exchange.
The industry association said four scheduled elections in 2024 brought high volatility to fund yields.
Three consecutive ballots to elect a new president and parliament in the European Union and NATO state descended into chaos when a little-known far-right pro-Russian politician won the first presidential round on Nov. 24. Amid suspicions of Russian interference, the top court annulled the election in December. The ballot will be re-run in May.
Romanians will increasingly rely on private pensions, particularly after 2030 when just under 2 million people – a tenth of the population – born under a communist-era abortion ban will reach retirement age, a destabilising increase to the pay-as-you-go state pension system.
($1 = 4.8423 lei)
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