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October 23, 2021
ECONOMY FINANCE&BANKING

Eugen Teodorovici not ruling out Pillar I Pension Fund money could be invested: Any state has this approach too

Finance Minister Eugen Teodorovici stated on Tuesday that Romanians can choose between the Pillar I and Pillar II pension funds, pointing out that a discussion on this topic will take place at the level of the Government.

Finance Minister Eugen Teodorovici gave assurances that the state can efficiently manage pension fund money.

“There is no kind of obstacle. Nothing is impossible, so to say. It’s true, we look at the practice seen so far, in which the state didn’t demonstrate it was a good manager in many areas of the economy, this is also true. But this doesn’t mean the state is condemned to wear the label of being unable to manage money – public or private – in a judicious manner,” the Finance Minister said.

Asked whether Pillar I Pension Fund money could be invested, Teodorovici answered: “Normally any state… the states usually have this approach too, of investing within and without the respective country.”

In response, PNL Senator Florin Citu has said that the nationalisation of the Pillar II Pension Fund will be carried out through an emergency ordinance that will have “an ugly variant,” generating higher interest rates for the state budget.

“Next week there will be an emergency ordinance that will have an ugly variant, to nationalise the Pillar II Pension Fund. Any intervention of this kind means volatility on financial markets, higher interest rates for the state budget, higher costs for everyone. What the Finance Minister, the Labour Minister and the PSD in general are telling us means, no matter how you turn it, higher costs for all those who are working today in Romania, only to pay some pensions that they hiked just like that, some special pensions, and some brazen pensions. We are talking about money, the private money from the Pillar II Pension Fund, RON 42 billion, this is in fact the stake we are talking about today, representing around 5 percent of GDP that they want to steal. To finance their election campaign promises,” Citu said.

However, Eugen Teodorovici says that there will be no emergency ordinance, and taxpayers will be given the possibility to choose between Pillar I and Pillar II, via a mechanism that will be discussed within the Government. “I said work is being done on a mechanism that would ensure the taxpayer’s possibility to choose between Pillar I and Pillar II. So, nothing hidden, [there is] nothing apart from something that is normal for any taxpayer,” he added.

 

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