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Assets held by Romania's seven mandatory private pension funds in 2023 rose 31.4% to 126.7 billion lei ($27.87 billion) while the average yield climbed to a record high 17.94%, the industry's association said on Monday.
The European Union member state overhauled its communist-era pension system in 2008, making it compulsory for working Romanians under 35 to contribute to a "second pillar" of private pension schemes as well as their state pension.
Roughly 8.1 million Romanians contribute to the seven funds, which are the largest institutional investors on the Bucharest Stock Exchange.
The funds were key to the successful listing of Romania's largest power producer Hidroelectrica, one of Europe's largest initial public offerings in 2023, which valued the company at more than $10 billion.
Romanians will increasingly rely on private pensions particularly after 2030, when just under 2 million people, or 10% of the population born under a communist-era abortion ban, will reach retirement age, a destabilising increase to the pay-as-you-go state pension system.
The coalition government has raised employees’ private pension contributions to 4.75% of gross wages from 3.75% previously, a requirement from Brussels in exchange for EU recovery funds.
($1 = 4.5456 lei) (Reporting by Luiza Ilie; editing by Jason Neely)