The Government okayed on Wednesday, by emergency ordinance, the implementation of the recommendations of the Organization for Economic Cooperation and Development (OECD) on the liberalization of services in the field of private pensions, in accordance with the OECD Liberalization Codes.
According to a press release from the Government, Romania’s adherence to these codes represents both an essential condition for completing the OECD accession process, as well as a strategic objective of foreign policy, assumed through the government program.
„Respecting the Liberalization Codes implies adapting national legislation to international standards regarding the free movement of capital and financial services. In this context, the institutions involved have the responsibility to adopt the necessary measures and to periodically report progress in fulfilling the accession criteria,” the press release informs.
Thus, the normative act brings the following new elements:
– defines the OECD Liberalization Codes as the legal instruments entitled the Code on the Liberalization of Capital Movements and the Code on the Liberalization of Invisible Current Transactions;
– introduces the possibility of extended market access for administrators from OECD member states who will be able to administer pension funds and manage the assets of participants in Romania; similarly, provisions are introduced regarding the entities responsible for the deposit and custody of pension fund assets, which will also include banking institutions from states adhering to the OECD liberalization codes authorized for the deposit activity;
– allows voluntary and occupational pension funds to apply age-adapted strategies: participants will be able to choose funds that automatically adjust the investment risk depending on the approach to retirement age;
– provides for jurisdictions adhering to the OECD liberalization codes conditions similar to those of the member states of the European Union and the European Economic Area, regarding pension fund investments in financial instruments traded on regulated and supervised markets in these states, including the flexibility of investment limits, according to the recommendations;
– establishes a more adequate framework of conditions that the participant must meet in order to receive a private pension (for example, eliminating the minimum number of contributions required to benefit from a private pension);
– completes the legislative provisions with elements that lead to the strengthening of the supervisory capacity of the FSA and ensuring market stability, for the appropriate protection of participants.
Thus, by adopting this emergency ordinance, Romania is closer to the OECD international standards, modernizes the private pension system and offers more security and flexibility for all those who contribute to these funds, the cited source specifies.
