April 2 (SeeNews) - Net assets under management by Romanian mandatory private pension funds decreased 6.7% on the year on average in the first quarter of 2020, impacted by the COVID-19 pandemic, Romanian pension funds' association (APAPR) said on Thursday.
"Restrictions imposed on the freedom of movement of people and goods in the context of the COVID-19 crisis have significantly affected the global economy, capital markets and quotations of all financial assets. Decreases in stock quotes of around 25% in Romania and on the main European markets (Germany, France, Great Britain) have led to a temporary depreciation of the value of assets managed by Pillar II of private pensions," APAPR said in a press release.
The business association emphasized that the depreciation is temporary and that the average yield of the pension funds was 1.3% higher year-on-year in January-March 2020.
"Panic is not justified in the case of short-term declines caused by objective events such as the current global crisis. With the expected economic recovery, the financial markets will recover as well as the results of the pension and investment funds, as has happened every time, including after the financial crisis of 2007-2009," APAPR added.
Net assets under management by Romanian mandatory private pension funds increased 27% on the year to 59.11 billion lei ($13.4 billion/12.2 billion euro) as of end-September, according to the most recent data published by the country's financial supervision authority ASF. The number of contributors to the second pillar of Romania's pension system topped 7.376 million as at the end of September.
The second pillar, which is operated by the private pension funds, is sustained by contributions of 3.75% of gross wage mandatory for people under 35 years old and optional for people aged between 35 and 45 years.
(1 euro=4.8288 Romanian lei)