The private pension market reached, at the end of September 2023, total assets of 121.55 billion lei

The private pension market in Romania has reached, at the end of September 2023 total assets of 121, 55 billion lei, up by 21.5% comparable to the end of the previous year and 32% reported to September 2022, according to a report published by the Authority for Financial Supervision (ASF).As share in the GDP, the total assets of the private pensions system have recorded a level of over 8% at the end of September 2023, showing positive evolution along the last years. In the Q3 of 2023, the volatility of unit assets of private pension funds has been moderate, with no short-term shocks, it says in a press release of ASF.The private pensions funds represent institutional investors who support, mainly the local economy with a role of balancing factor and stability for the financial market.As regards Pillar II, the total value of assets of the pensions funds managed privately was 117.17 billion lei at the end of September 2023, up by approximately 32% as compared to the same date of 2022.‘This represents a historic maximum, being the best year recorded by the system of pensions privately managed (Pillar II)’ says the report.Compared to December 2022, the value of total assets increased by 21.5%. The number of registered participants in the Pillar II scheme was 8.09 million, compared to 7.96 million at the end of the previous year.   At Pillar II level, the average contribution of participants with contributions paid on 30 September 2023 was approximately 266 lei/participant, while on 31 December 2022 it was 237 lei/participant.   In the period January-September 2023, contributions paid into the privately administered pension system amounted to 9.54 billion lei, up by about 16% compared to the same period in 2022.   The weighted average rate of return of all privately managed pension funds was 5.86% in September 2023, up from 4.13% at the end of 2022.   At the end of September 2023, the average asset value of a participant in the privately administered pension scheme was 14,630 lei, an increase of almost 29% compared to the same period last year and an increase of 19.5% compared to the end of 2022.   During the first nine months of 2023, net personal asset payments to participants were made in the amount of 654 million lei for 39,976 participants and beneficiaries.   At the end of September 2023, government securities and equities remained the main financial instruments in which privately managed pension funds invested. Private pension funds' investments in government securities represented 64.4%, up from 62.3% at 31 December 2022. At the same time, investments in equities accounted for 23.3% of the total assets of Pillar II pension funds. Assets were also invested in corporate bonds (5.09%) and bank deposits and current accounts (3.79%).   As regards Pillar III, the total value of the assets of the voluntary pension funds was 4.38 billion lei at the end of September 2023, an increase of about 31% compared to the same period of last year. Compared to December 2022, the value of total assets increased by 21%.The number of registered participants in the voluntary pension scheme on 30 September 2023 was 687,400, up 9.7% on the end of the previous year and 13.8% on the same period in 2022.   At the Pillar III level, the average contribution of participants with contributions paid as of 30 September 2023 was approximately 157 lei/participant, a level similar to that recorded in the same period of the previous year.   In the period January-September 2023, the contributions paid into the voluntary pension scheme amounted to about 436 million lei, up 19% compared to the same period of 2022.   The weighted average rate of return of all high-risk voluntary pension funds was 5.41% in September 2023, while the weighted average rate of return of all medium-risk voluntary pension funds was 4.33%.   At the end of September 2023, the average value of an account in the voluntary pension system was 6,366 lei, 10.3% higher than at the end of the previous year.   In the period January-September 2023, net personal asset payments to participants amounted to RON 85 million for 8,512 participants and beneficiaries.  At the end of September 2023, government securities and equities remained the main financial instruments in which voluntary pension funds invested. Investments in government securities accounted for 64.5%, up from 63% at 31 December 2022. At the same time, investments in equities accounted for 25.2% of the total assets of Pillar III pension funds. Assets were also invested in bank deposits and current accounts (3.7%) and corporate bonds (3.6%).   The Financial Supervisory Authority is the national authority, established in 2013 by GEO 93/2012 approved by Law 113/2013, for the regulation and supervision of the insurance, private pension and capital markets. The FSA contributes to strengthening the integrated framework for the functioning of the three sectors, which total more than 10 million participants.