December 19, 2018 / 6:23 AM / 7 months ago

Romanians could opt out of private pension funds-draft bill

BUCHAREST, Dec 19 (Reuters) - Romanians could choose to withdraw from mandatory private pension funds after contributing for five years and for an early withdrawal fee, according to a draft bill published by the finance ministry late on Tuesday.

Romania 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. Pension funds have assets worth roughly 10 billion euros ($11.38 billion).

The government also aims to lower funds’ management fees to 1 percent from 2.5 percent. The ruling Social Democrats have gone backward and forwards on plans for the private pension scheme, weighing options such as dismantling the second pillar altogether, reducing contributions or making them optional. ($1 = 0.8786 euros) (Reporting by Luiza Ilie)

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