In mid-April, Government Emergency Ordinance no. 26 was approved, amending Law no. 204/2006 concerning optional pensions (Pillar III).
This move aligns the Romanian financial sector with investment practices widely adopted in developed markets, according to the Romanian Private Equity Association (ROPEA).
However, ROPEA emphasizes that the new regulations' impact on the private equity market will be limited without further action. The association has communicated to authorities the necessity of establishing a dedicated and unconditional minimum quota of 5% for Pillar II pension funds. They argue that without this provision and clarifications regarding the eligibility of funds financed through the National Recovery and Resilience Plan (PNRR), significant and impactful investments will not materialize in the near future.
ROPEA highlights the disparity between the assets managed by Pillar III (approximately €1.2 billion, potentially yielding up to €100 million) and Pillar II (over €30 billion, with a potential cumulative sum of €300 million to €1.5 billion).
“We believe this is a positive and necessary step that could contribute to increasing returns for future pensioners, especially in the current context of high inflation and the devaluation of returns on government bonds. However, without immediate clarification and operationalization of the 5% quota for Pillar II, the real impact of this measure risks remaining purely theoretical,” stated Andrei Gemeneanu, President of ROPEA.
Additionally, ROPEA stresses the need for secondary legislation to clarify that funds financed through the PNRR qualify as "funds in which the Romanian state holds shares or holdings" to ensure their eligibility within the 5% allocation.
Investments in private equity and venture capital could help increase returns for Romanian pension funds, which have reported a 7.5% average annual nominal return. The result is tied to their current strategy of holding approximately 65% in government bonds and 20-25% in listed equities, mainly on the Bucharest Stock Exchange (BVB).
