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    Press release: A.S.F. welcomes the decision of the Constitutional Court on the rejection of unconstitutionality objections regarding GEO no. 174/2022

Press release: A.S.F. welcomes the decision of the Constitutional Court on the rejection of unconstitutionality objections regarding GEO no. 174/2022

Bucharest, 6 April 2023 The Financial Supervisory Authority welcomes the decision of the Constitutional Court to reject the objections of unconstitutionality, which were raised in relation to the Law on the approval of Government Emergency Ordinance no. 174/2022 amending and supplementing certain regulatory acts in the field of private pensions.

The measures to reform the legislation in the field of private pensions aim on the one hand to improve the supervisory capacity of the Financial Supervisory Authority in the interest of consumers and on the other hand to strengthen the regulatory framework.

As a reminder, the main amendments to the legislative framework governing the private pension system provide for:

  • the establishment of principles on investment rules and on the way fund assets are valued and the responsibility of managers;
  • the establishment of an obligation for the manager to hold at all times an adequate level of liquidity, the amount of which covers the current business for a period of at least 6 months;
  • the introduction of provisions on the requirements for key persons and express provisions on their authorisation; the establishment of the duties of investment officers among managers;
  • the establishment of the board's obligations to define and supervise the implementation of governance mechanisms that ensure the effective and prudent management of an organisation, including segregation of duties within the organisation and the prevention of conflicts of interest, in a manner that promotes market integrity;
  • the segregation of duties and responsibilities of the different management, supervisory and control structures, as appropriate, so as to avoid potential conflicts of interest and give the necessary authority and independence related to supervisory positions;
  • the establishment of a single management fee charged by the manager for the provision of main and secondary/related activities;
  • the supplementation of the reporting and transparency requirements;
  • the establishment of the right of participants and beneficiaries to claim the payment of their net personal assets or private pension as non-forfeitable;
  • the introduction of the possibility that, in the event of the triggering of the special administration procedure, ASF may designate the Private Pension System Rights Guarantee Fund as a special administrator, under the conditions established by regulations, in order to ensure an additional level of security of the private pension system in case no other manager meets the legal requirements in this respect;
  • the supplementation and clarification of the penalty regime.

This law amends Law no. 411/2004 on privately managed pension funds, republished, with subsequent amendments and supplementations, Law no. 204/2006 on voluntary pensions, with subsequent amendments and supplementations, as well as Law no. 187/2011 on the establishment, organisation and functioning of the Private Pension System Rights Guarantee Fund.