According to the recently published Government Emergency Ordinance no. 82/2017, from 1 January 2018, the contribution to the privately managed second pillar pension funds will be reduced from 5.1% to 3.75%. The government has reduced these contributions in an attempt to secure a lower budgetary deficit in 2018, and to more effectively implement the recent fiscal changes. The government has anticipated that the decreased contribution percentage will not affect the absolute value of the amounts saved by the second pillar participants.

The initial reaction of the market has been to provide a negative feedback regarding these changes; we will keep you updated in relation to additional market’s response.