Corina Cojocaru, CEO of BT Pensii, shared comments with Hotnews.ro about the growing interest in voluntary pensions, from all angles:

Access to accumulated savings and the pension payment period

We are seeing some concerns from pension fund participants, based on the questions they ask when they visit us:

• Access to accumulated savings – people worry they will only be able to withdraw 30% of their money. Under current legislation, they will receive all of their money back, but staggered in monthly payments. The 30% refers to the portion of the accumulated amount that can be taken as a single lump sum. The remaining 70% continues to earn returns and is paid out in monthly instalments, topping up their state pension. Capping the lump-sum withdrawal at 30% of the accumulated balance is also a long-term protection measure. It is important to understand that Pillar II and Pillar III complement each other, but they cannot be treated as accumulation or savings accounts from which the full amount can be withdrawn at once. Financial security requires predictability, and the withdrawal cap helps ensure there is money to be received over a longer period. Such a system curbs spur-of-the-moment decisions, where the money could be spent quickly and unpredictably, leaving the person without a reliable source of income.
  
  
• The 8-year pension payment period – some people feel this is too long. The average Pillar II account balance is now just over 20,000 lei which, if paid in monthly instalments of 1,281 lei, the current social allowance for pensioners, would be exhausted in under a year and a half. Therefore, people need to build up much larger amounts in a private pension fund. And if something unfortunate happens during those 8 years to someone who has accumulated such amounts, the money is not lost, because it is inherited.

Growing interest in voluntary pensions and a record month for BT Pensii:

Amid the broader public discussion about pensions, we note rising interest in voluntary pensions.

On the one hand, this is coming from our existing participants, most of whom want to know how much they have accumulated or ask general questions about saving for retirement.

On the other hand, the interest is visible in the number of new participants in voluntary pension funds. Over 7,000 people joined in August one of the voluntary pension funds managed by BT Pensii, a record for the number of new clients in a single month in the company’s 18 years of activity. The record is also the result of voluntary pensions becoming accessible in the BT Pay app, a feature announced by the Banca Transilvania Group also in August: in just two weeks, over 1,500 people joined Pensia Mea/Pensia Mea Plus via the app.

The full article is available here.