ARHIVELE OLTENIEI - Universitatea din Craiova

304Roxana Radu, Florin NacuIn post-communist Romania, public pensions were practically the onlysource of pensioners’ income. This reality was caused by the fact that voluntaryprograms of private pensions were created in Romania of the ’90 by investmentfunds and operated in a legislative void. In the absence of strict regulations andcontrol mechanism, the majority of investment funds were fraudulently managedand disappeared without indemnifying their shareholders 3 .Law no. 411/2004 concerning pensions funds privately managedcompletes the legislation regarding Romanian pension system, having in view theaim of providing a private pension meant for supplementing the pension obtainedfrom public system, on the basis of collecting and investing, in the participantsinterest, of a part of their individual social insurance contribution. In this way,Romanian pension system get three components: one compulsory component,redistributive, publicly managed (pillar I), juridically constituted by Law no.19/2000 concerning the public system of pensions and other social insurancerights, with subsequent modifications and completions; a compulsory component,based on capitalization, privately managed (pillar II), regulated by Law no.411/2004 concerning pensions funds privately managed; a facultative component,based on capitalization, also privately managed (pillar III), its juridical framebeing outlined by Law no. 204/2006 concerning facultative pensions.Sketch of a pension systemPillar I Compulsory, PAYG (repartition)Public or privateMain goal:• avoiding poverty of elderly people• income related pension (defined quantum, defined contribution)Redistribution type:• interpersonal• intertemporal (tight link between contribution and quantum)Pillar II Compulsory or volunteerFunded or PAYGPublicly or privately managedRelated to occupation or enterpriseDefined quantum or defined contributionPillar III FacultativePrivately managedDefined contributionSource: GVG (2002), Study of the Social Protection System in the 13 ApplicantCountries. Synthesis Report, Second draft 4 .Law no. 411/2004 concerning pensions funds privately managedintroduced the second pensions pillar and promotes principles such as the3Livia Popescu, East-European Social Policies between State Paternalism andIndividual Responsibility, Cluj-Napoca, Academic Press, 2004, p. 102.4 http://europa.eu.int/comm/employment_social/index_en.html.