Evolution of the private pension system in 2023

Bucharest, 2 April 2024 - The private pension market in Romania reached, at the end of 2023, total assets worth RON 131.5 billion, up by 31.4% compared to the end of the previous year.

As a share of GDP, total private pension assets stood at around 8.5% at the end of December 2023, marking a positive development over recent years. In the last quarter of 2023 and for the year as a whole, the volatility of unit net assets of private pension funds was moderate, with no short-term shocks.

Private pension funds are institutional investors that mainly support the local economy, while acting as a balancing and stabilising factor for the financial market.

Pillar II

Total assets of privately managed pension funds amounted to RON 126.74 billion as at 31 December 2023, an increase of about 31.4% compared to the same date in 2022. This is an all-time high and the best year on record for the privately administered pension system (Pillar II).

The number of registered participants in the Pillar II system was 8.15 million at the end of 2023, compared to 7.96 million at the end of the previous year.

At Pillar II level, the average contribution of participants with contributions paid in December 2023 was about 276 lei/participant, while at 31 December 2022 it was 237 lei/participant.

During 2023, the contributions paid into the privately administered pension system amounted to RON 12.82 billion, an increase of about 17% compared to the previous year.

The weighted average rate of return of all privately administered pension funds was 7.39% in December 2023, up from 4.13% at the end of 2022.

At the end of 2023, the average asset value of a participant in the privately administered pension system was RON 15,700, an increase of more than 28% compared to the same period of the previous year. 

During 2023, payments of net personal assets to participants were made in the amount of RON 919 million for 54,518 participants and beneficiaries.

At the end of December 2023, government securities and equities remained the main financial instruments in which privately administered pension funds were invested. Investments of privately administered pension funds in government securities accounted for 66.42%, up from 62.3% at 31 December 2022. At the same time, investments in equities accounted for 23.32% of the total assets of Pillar II pension funds. Assets were also invested in corporate bonds (5.61%) and investment funds (2.63%), with the percentage of bank deposits and current accounts falling to 1.14%.

Pillar III

Total assets of voluntary pension funds amounted to RON 4.75 billion at the end of December 2023, up by about 31% compared to the same period last year.

The number of registered participants in the voluntary pension system as at 31 December 2023 was 710,777, an increase of 13% compared to the same period in 2022.

At the Pillar III level, the average contribution of participants with contributions paid as at 31 December 2023 was approximately RON 168/participant, a similar level to that recorded in the same period of the previous year.

During 2023, contributions paid into the voluntary pension system amounted to approximately RON 601 million, up 20% compared to the same period in 2022.

The weighted average rate of return of all high-risk voluntary pension funds was 7.24% in December 2023, while the weighted average rate of return of all medium-risk voluntary pension funds was 5.87%.

At the end of 2023, the average value of an account in the voluntary pension system was 6,668 lei, 15.5% higher than at the end of the previous year.

During 2023, payments of net personal assets to participants were made in the amount of RON 113 million for 11,210 participants and beneficiaries.

At the end of 2023, government securities and shares remained the main financial instruments in which voluntary pension funds invested. Investments in government securities accounted for 66.7%, up from 63% at 31 December 2022. At the same time, investments in equities accounted for almost 25% of the total assets of Pillar III pension funds. Assets were also invested in corporate bonds (4.2%) and investment funds (2%), with the percentage of bank deposits and current accounts falling to 1.1%.

The report on the evolution of of the private pension system in Romania in 2023 can be found HERE. ( in Romanian)