The Romanian Parliament has passed a new law on private pension funds. It will come into effect on 1 July 2006.A pensions commission, under the control of the parliament, is being set up to supervise the new pension funds.
The new law lays down rules for the establishment and administration of pension funds, and the instruments in which they are allowed to invest. They can buy money market instruments; Treasury Bills issued by the Ministry of Finance and other financial instruments issued by the National Bank of Romania; bonds and other securities issued by local authorities, provided they are listed on an authorised stock exchange; securities traded on local markets supervised by the National Securities Commission; bonds and other securities issued by other governments or central banks in accordance with the stipulations of the Commission; external non-governmental bonds or securities, if they are listed on an authorised Stock Exchange, in accordance with Commission rules.
The contributors to the pension funds are intended to be taxpayers under 35 years old who have never contributed to the pension scheme before, and taxpayers under 45 years old who are already contributors to the public pension scheme.
The scheme will come into full effect in early 2008.