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March 28, 2023

Pensions House takes out loans, yet doesn’t concern itself with receivables and surplus

The National House of Public Pensions (CNPP) is due receivables worth RON 25 bln, registered a surplus of RON 3 bln in late 2010, and, despite all this, it still draws huge loans from the Treasury, to which it pays high interest, to fill the gaps, the “Romania Libera” newspaper reports. Inspectors at the Court of Audits have drawn attention to the poor handling of public money. The House of Pensions piled up increasingly high amounts of receivables during 2006-2010 from unpaid social contributions. While they were included in accounting records, nobody however concerned themselves either with prescription deadlines or their sources of origin.

The CNPP leadership defends itself saying it has no duties with respect to collecting social contributions since as early as 2004, given this has become the task of the National Agency of Fiscal Administration (ANAF), which should be the authority knowledgeable as far as receivables are concerned.

The work accidents and occupational disease Department of the CNPP recorded a surplus of over RON 3 bln at the end of 2010. Yet, the surplus too was not properly managed, according to Court of Audit inspectors, as all the money was kept in Treasury accounts, and not deposits, which would have made resulted in more money from interests higher than the overnight rates. This translated in RON 504 M being lost during 2008-2010. The CNPP leadership says it only opened deposits in 2011, from which it will cash more money from interest in 2012 than from overnight rates.

Also, the CNPP came to borrow an average of RON 3 M daily from the Treasury, in order to plug the temporary deficit in the pension system. Interest worth close to RON 100 M was paid on those loans. Had receivables been recouped, the CNPP would have had the funds needed in 2008-2010 to make up for the deficits of the past 31 years, and not borrow RON 3 M a day.

Overall pension spending rose more than five-fold during 2001-2010, as a result of the number of pensioners, and pension amount, implicitly, going up.

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