An investigation into the performance of second pillar private pension funds in Romania
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- Title
- An investigation into the performance of second pillar private pension funds in Romania
- Creator
- Henrik R. England
- Date
- 2016
- Abstract
- After nearly two decades of operating under a pension system inherited from the communist days of pre-1989, Romania made a transition to a three-pillar pension system in 2008. The aim of this dissertation is to examine the performance of the second pillar private pension funds in Romania and ascertain the sustainability of the current framework. Additionally this research aims to identify possible options for the reorganization of the system in the future. The investigation began by exploring pension funds and implemented frameworks as well as their advantages and disadvantages. By conducting the literature review the author has identified a scarcity of recent studies pertaining to the Romanian pension fund system in particular to the private second pillar. The literature review manages to identify a relevant theory relating to size and performance in the work of Robu and Sandu (2011) with regards to the performance of second pillar pension funds in Romania who do not behave in accordance to earlier theories put forward by researchers such as Chen et al. (2004). Moreover the literature review identifies different types of frameworks such as risk-based and rule-based as well as the possibility for structural reorganization in the form of lifecycle funds. Secondary data collected from the CSSPP1 was analyzed using multiple regression and this analysis ascertained that there is a link between the portfolio structure of the funds and their returns. This is relevant as there are significant limitations being imposed upon the second pillar pension funds by the regulatory authority in terms of asset placement. Primary data was compiled from interviews conducted with members and representatives of both the regulatory authority and the second pillar pension funds. The researcher makes recommendations for gradual reform of the second pillar system and recommendations for future studies to be conducted that may offer a better understanding of the evolution of the second pillar environment in Romania. Such studies would aim to ascertain the feasibility of implementing a lifecycle system and would also examine the effects of a more relaxed framework by comparing the second and third pillars in Romania. Considering the investigation as a whole, a number of limitations become apparent, the most prevalent of these being the size constraints and the limited time frame during which this study was conducted.
- Subject
- Finance
- Pension funds
- Romania
- Extent
- 53 pages
- Format
- Publisher
- Regent's University London
- degree
- BA Global Management (Finance pathway)
- Language
- English
- Date Issued
- 2016
- Type
- Report
- Rights Holder
- Henrik R. England and Regent's University London
- Item sets
- Theses or Dissertation