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November 18, 2019
BUSINESS

Eureko: 2013, another year of consolidation and significant growth for private pensions

General public awareness on private pensions is very far from a satisfactory level and apart from information campaigns and the efforts that the authorities are making along with the players  within the system, an enhancement of the private pension system’s notoriety will come naturally as the value of the accounts will grow and people will realize that they have a significant sum of money that they will be able to use when they will retire and that they meanwhile have to manage it, Radu Bragarea, General Manager of Eureko Pensii, stated. “Another weak point is the relatively small current contribution to mandatory pensions, as a percentage of income, a contribution insufficient for ensuring a satisfying income replacement rate – the first pension,” he added. At the same time, Bragarea considers that the biggest threat to this segment comes from the political scene. “The possibility of sacrificing the citizens’ long-term priorities, namely the pensions of those who are now working, in order to solve short-term problems and to spend their contributions out of political “shortsightedness” represents a major risk for the system,” the executive of Eureko Pensii stated. Another risk has to do with frequent legislative changes in a system thought out to have a cycle (contributions – accumulation – pension) spanning several decades. “Such changes could lead to loss of confidence on the part of the participants to the system, confidence that was built with difficulty and that is still pretty fragile.” Nevertheless, the private pension industry’s most important trump card is given by the investment results that have been positive so far and that offer the population an added confidence and hope in the pensions’ system, Bragarea opined. Bragarea considers that 2013 will be another year of consolidation and significant growth for administered assets, mainly due to the growth of contributions and of the number of participants.

 

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