PM Tudose: Pillar II pension funds' average return at roughly 4 pct

The average return on the privately managed Pillar II pension funds from 2008 to date was roughly 4 percent, explains Premier Mihai Tudose in reply to criticism sparked by his recent remarks about the higher return on the Romanians' pension contributions under Pillar I compared to Pillar II, as he came under fire for claiming Pillar I pension scheme could produce a return despite not being an investment. 

"Under Pillar I, the pension point is calculated as the ratio of the collected wage to the average wage. This means that a person whose annual salary increased by more than 4 percent over the rise in the average wage will collect more money upon retirement than someone who also opted for Pillar II," Tudose wrote on Facebook on Friday. 

As a "concrete example" he cited the category of employees who were paid the minimum wage throughout the period 2008 - 2017. "[The minimum wage] increased by about 180 percent during this period, while the average wage advanced by less than 100 percent. It follows that this prompted a pension point rise by over 80 percent compared to 40 percent for those who also opted for the Pillar II scheme," the Prime Minister explained. 

"The return I had in mind, computed in relation to the pension point, referred to the amount collected by the contributor at retirement in the two variants: the one who opted, versus another one who did not opt for Pillar II," Tudose added.

AGERPRES.