The Council of the Oversight Committee for the System of Private Pensions (CSSPP) approved on 6 June 2007 the authorisation for SC Aviva Company for Administration of a Private Pension Fund Ltd to set up as a pensions company in the privately administered pensions system, in accordance with the provisions of law 411/2004 regarding privately administered pension funds (pillar II).
The Council of the Oversight Committee for the System of Private Pensions (CSSPP) approved on 6 June 2007 the authorisation for SC Aviva Company for Administration of a Private Pension Fund Ltd to set up as a pensions company in the privately administered pensions system, in accordance with the provisions of law 411/2004 regarding privately administered pension funds (pillar II).
Aviva thus becomes only the second company authorised to establish a private pensions company.
In the first year of operation of pillar II, 2% of participants' state social security contributions will be transferred to these funds. The transferred contribution will then be increased by 0.5% per year, up to 6% in eight years.
"We were extremely pleased with the news that we received from the Committee. We can't wait to take the next steps in order to put this into action! Aviva will invest up to €100 million in the new pensions company and will use all the expertise that it has gained from markets across the world to offer Romanians security and an increase in their incomes for retirement. With thorough financial planning, everyone can enjoy a decent pension, contributing accessible amounts to a private pension plan.
"Aviva will have at its disposal a sales team of over 20,000 marketing agents who will help the Romanians to understand pensions products and the way in which these can meet their specific needs," stated Adrian Allott, CEO of SC Aviva Company for Administration of a Private Pension Fund Ltd.
Over four million people in paid employment will contribute to a compulsory private pension and 600,000 will contribute to a voluntary pension in the first five years. Approximately 3 million employees will join the compulsory pensions system (pillar II) this year, going on to be joined by a further one million by 2011. Around 200,000 clients will enter the voluntary pensions system this year, and this number will grow to 600,000 participants in the first three years.
Aviva is already an active player on the Romanian pensions market, its voluntary pension fund "My Pension" (pillar III) having received CSSPP authorisation on 15 May. "My Pension" is one of the first voluntary pension funds to have been authorised by the CSSPP, and the administrator, Aviva Life Insurance, has already progressed to the collection of contributions from future participants.
An individual can make contributions to the voluntary pensions system up to a maximum of 15% of his or her gross monthly income, whilst being able to benefit from an additional income when he or she reaches the age of 60. Contributions to pillar III are tax-deductible up to a limit of 200 euros for an employer and €200 for an employee.
The voluntary pension fund "My Pension" administered by Aviva Life Insurance has the following structure of assets:
- 75% fixed income financial instruments and 25% indexed shares
- The financial instruments are represented by long-term state deeds, corporate and municipal bonds, as well as other investment instruments available on the monetary market
- The local stock market indexed shares are those found in the BET (the Bucharest Stock Market index) and BET FI (BSE financial index) listings.
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For further information:
Giliola Ignat
Telephone: 021 203 83 73
Notes to editors:
About Aviva
Aviva Life Insurance is part of the Aviva group, the largest insurance provider in Great Britain, occupying leading positions on the majority of the markets in which it operates; the pension fund administered by Aviva Poland was recently named as the highest performing in Central and Eastern Europe. The group administers €535 billion worth of assets*, representing the money of over 40 million clients worldwide.
In Romania, Aviva has over 430,000 clients and has a presence in 19 towns and cities.
* As at 31 December 2006