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May 10, 2021

Private pensions scandal:ASF issues RON 750,000 fine against NN Pensions, equivalent of 1 pc of its registered capital; company CEO’s authorisation rescinded

The Financial Oversight Authority’s (ASF) Council issued a RON 750,000 fine against NN Pensions, representing 1 percent of the company’s registered capital, after the company sent its clients a newsletter informing them that in recent weeks there has been public talk of a possible decision to nationalise the private pension funds, ASF Vice President Ion Giurescu stated on Thursday.

“As a result of the communiques that NN sent to its clients on April 11, we decided yesterday (Wednesday – editor’s note) to hear the NN Fund’s Administrative Board, which consists of three persons: Marius Popescu, Raluca Tintoiu, Madalina Ecaterina Ducan. Raluca Tintoiu is also CEO of NN Pensions. Two of the three showed up, one of them – Marius Daniel Popescu – being on leave. The conclusions of the hearings are the following: considering the circumstances created, liable to affect the confidence of the participants to the Romanian private pension system, the ASF Council has decided to censure NN Pensions by issuing against it a fine representing 1 percent of the company’s registered capital, namely RON 750,000,” Ion Giurescu stated.

Likewise, the decision was made to rescind CEO Raluca Tintoiu’s permit and to fine her RON 100,000.

According to the ASF official, this is the largest fine ever issued by the institution, but not the largest in the history of Pillar II. The largest fine in the history of Pillar II was issued against the same company, in the early days of this pension system, because of an outsourcing contract, and totalled EUR 360,000.

Asked about the comments that BCR Pensions CEO Radu Craciun posted on his blog, Ion Giurescu stated that the situation is different, considering that those statements were made in his personal capacity, without being sent to clients. Nevertheless, ASF will conduct an audit at BCR Pensions in the upcoming period.

Asked if the fine issued against NN Pensions comes against the backdrop of the political statements made on Wednesday, Ion Giurescu pointed out that the decision to hear the representatives of NN Pensions was made on Wednesday at noon and had nothing to do with any political statements.

Likewise, he emphasised that there have never been talks about nationalising Pillar II since he started working in this field, over 11 years ago.

In regard to a possible NN Pensions challenge against the fine, the ASF representative pointed out that ASF is yet to lose a lawsuit.

On the other hand, Ion Giurescu pointed out that the fine will have no impact on the company’s investments.

PNL First Vice President Catalin Predoiu had stated last week that the Government is mulling nationalising the private pensions to make up for the budget deficit’s backsliding. Subsequently, NN Pension Fund informed its clients that in recent weeks there has been public talk of a possible decision to nationalise the private pension funds and advised them to stay abreast of market developments.

In response, Finance Minister Viorel Stefan emphasised that the information regarding the Government’s alleged plan to nationalise Pillar II is “baseless” and added that there is “no political, economic, financial, budgetary reason” for such a decision.


Lower Chamber Speaker Dragnea on NN newsletter on mandatory private pensions’ nationalisation


In his turn, Lower Chamber Speaker and Social Democratic Party (PSD) President Liviu Dragnea on Wednesday night said that “the scandal” generated by the newsletter issued by NN company is in fact “a fake” started by Financial Supervisory Authority (ASF) President Misu Negritoiu, and the Romanian Government should ask the Dutch Embassy in Bucharest and the leadership of ING Romania for explanations.

“As far as this scandal is concerned, in fact a fake about the nationalisation of the private pensions, this is started by Mr. Misu Negritoiu, who is the President of the ASF, who knows very well that the Parliament will soon sack the entire management of the ASF because what is happening there is very serious and the ones who suffer are the Romanian clients and the Romanian insurees. On the other hand, I believe that the Romanian Government should ask the Dutch Embassy and the Dutch Government and the ING management for explanations because what this insurance company did in Romania perhaps they could have done (…) in a former Dutch colony. Such a thing is not allowed in Romania,” Dragnea told private television broadcaster Antena 3.

He stressed that the Dutch could be “upset over the corvettes”, but added that what the NN company did is “forbidden” because “such information could lead to the collapse of a system.”

Likewise, Dragnea pointed out that ASF President Misu Negritoiu as well as the entire leadership of the institution will remain in office only for the duration of the parliamentary procedures that will start immediately after Easter.


ASF’s Negritoiu: Talk on pensions’ nationalisation is a smokescreen, notion doesn’t exist


Talks of the nationalisation of pensions is nonsense in economic terms, just a smokescreen, because the notion of nationalisation does not exist given that Pillar II is funded by the state through budget allocations, Chairman of the Financial Oversight Authority (ASF) Misu Negritoiu said Thursday.

The head of the ASF noted, however, that on Thursday there will be talks at the level of the authority on possible sanctions against NN Pensions.

“There was no dialogue. We haven’t been asked for any opinion. There was no discussion. There was no initiative. We consequently reacted after the political side gave its verdict and especially the Ministry of Finance. Economically and financially, this smokescreen is nonsense because the notion of nationalisation doesn’t even exist. The second Pillar pension fund, because we are talking about the second Pillar, is funded by the state through budget allocations, to a greater or lesser extent. This is the political decision. We don’t intervene, nor do we lobby for a greater or lesser share,” said Negritoiu.

He said the law setting up the ASF expressly mentions that the authority necessarily needs to be consulted on all political decisions to be made regarding the markets it oversees.

“A brief interpretation of the public debate about the fate of private pension funds. It is at the level of political statements and has also been generated by a political statement. Through its statutes and its mission, the ASF is under the political radar. It does not pertain to the political debate or its mission to ensure financial stability in the context of the country’s economic and financial policies. I did not participate in this political debate, nor was our role to do so. The discussion needed a political response that was given. Our role perhaps kicks in when a possible economic or financial motivation is discussed, and we are usually called upon to express our opinion when a political decision is taken,” noted Negritoiu.

According to him, the role of the ASF is to manage what the state allocated and to ensure the oversight and stability of the markets and the protection of consumers and contributors.


PM Sorin Grindeanu: Nonsense spread by a politician


Premier Sorin Grindeanu stated on Thursday that the scandal concerning the nationalisation of private pensions is a rumour, nonsense spread by a politician – naming Catalin Predoiu –, and that the state will use all levers to hold accountable those responsible for the situation created.

“I’ve talked with the President of ANAF [Romanian Tax Authority] and the Finance Ministry and I want to tell you that, aside from the serious part that the state must play – whether we’re talking about the ASF or the Finance Ministry –, I’m looking at this from another standpoint too and you should think about the origin of this scandal, which has no basis in reality. A domestic political competitor, Mr Predoiu, brought this topic to attention. I’m looking with disappointment at this manner of politicking. I stress that this intention does not exist and those who bring this up in the public space and sow mistrust will have to be held accountable through the levers the state has – whether we are talking about commissions of inquiry, the ASF, the ministry. We cannot fool around with rumours that generate market turmoil,” Premier Sorin Grindeanu stated on Thursday.

The Head of Government dismissed the possibility of nationalising private pensions.

“We refute this nonsense tossed around by a politician. (…) What this company (NN Pension Fund – editor’s note) saw fit to do and the way they communicated… we’ll see what legal measures we can take as a Government,” Grindeanu added.


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