What happens to private pension funds

The private pension funds in Romania cumulated assets in the amount of 156.44 billion lei at the end of December 2024, increasing by 19% compared to the same period of the previous year, according to a report of the Financial Supervisory Authority (ASF).

« Volatility has increased on financial markets in the second part of 2024, against the backdrop of major geopolitical and economic events, such as European and American elections or new challenges determined by the transformations envisaged in the US economic policy, including the possibility of introducing commercial tariffs and measures to reduce and simplify the regulations of the financial markets, which could have a significant impact on this economy. High level of inertness, although the main central banks have made efforts to relax the financial conditions and reduce the interest rates.

Referred to June 2024, the total assets of private pension funds increased by 5.3%. Thus, at the end of 2024, privately administered pension funds (Pillar II) accumulated assets in the amount of 150.88 billion lei, 19% more than December of the previous year. The optional pension funds (Pillar III) accumulated assets worth 5.55 billion lei, 17% more than the same period of the previous year.

As a share in GDP, the total assets of the private pension system registered a level of 9.06%, at the end of December 2024.

« The financial instruments in the portfolios of private pension funds that are traded on financial markets are evaluated by market marking, regardless of the time period for which they are stipulated in portfolios. In this situation, the evolution of the unitary value of the net assets of private pension fund Private pension funds is a long -term one, the funds demonstrating a good resilience following the shocks that have affected the financial markets in the past ”, the report is mentioned.

On December 31, 2024, 9.12 million participants were registered in the 17 private pension funds, at the end of the previous year, a number of 8.86 million participants were registered. The number of participants in the private pension system was 8.29 million people, compared to 8.15 million people registered in December 2023, and the number of participants registered in the optional pension system was 833 thousand people, compared to 710,800 persons registered on December 31, 2023.

The investment policy within the assets of private pension funds continues to be focused on the local financial market, the share of investments in fixed income instruments representing 72% of the total investment portfolio of private pension funds. At the end of December 2024, a percentage of 23% was invested in shares.