How to make payments from Pillar II after retirement and what happens to the money left if you do not have heirs / all explanations

“These payments that will be staggered will be guaranteed. They will never receive less than they have received when they entered the payment fund,” Ileana Horvath, director on the private pension sector of ASF, gave insurance during today's conference in the Government, in which the new law was announced in Pillar II.

• Over 9.3 million Romanians who have mandatory private pensions (Pillar II) and optional (Pillar III) will no longer be able to withdraw all their money at once, after obtaining the retirement decision, as at present, but a maximum of 25% of the amount, and the rest, monthly, throughout life, shows a draft law discussed on Friday.
• The adoption of this law is a condition of accession of Romania at the OECD and is motivated by the massive retired exits expected in 2030, held on Friday at the Government Alexandru Petrescu, the president of the Financial Supervisory Authority (ASF), an institution that regulates the insurance and private pensions market.

The president of the ASF emphasized on Friday in the Government that “at the time of establishing the privately administered pension funds, in 2008, there was a commitment that in 3 years at that time there would be a legislation that the payment of accumulations in the private administered funds, but this has not happened.”

Payment of private pensions has so far made through a provisional way.

Thus, at present the participants in the Pillar II of pensions who go to retirement have two options to receive the accumulated amounts: either they choose to take all the money at once, or staggered by monthly payments for a maximum of 5 years (at most 60 monthly payments).

The main proposed changes

Introduction of payment funds: Special funds will be created, separated by those of accumulation (in which the money is raised), which will be administered by new entities called “private pension providers”. These suppliers can be administrators of current pension funds, insurance companies, investment management companies or new companies specially established for this purpose.

Two main forms of payment of pensions:

– “programmed withdrawal” type pensions: You receive a monthly amount over a fixed period (maximum 10 years). The money accumulated is guaranteed, and in case of death your heirs can receive the remaining amount. This option is similar to the Bulgarian system.
– life pensions: You get a monthly amount throughout your life no matter how much you live. This variant is managed by insurance companies and may include an option for heirs.

Partial withdrawal of maximum 25% of the money accumulated: The project allows the withdrawal of a flat amount of up to 25% of the total value of the account, a measure similar to those applied in other European countries such as Bulgaria. The rest of the money would be paid staggered.

Money reinvestment: An important novelty is that the payment funds will reinvest the amounts in the participants' accounts, in order to generate additional efficiency. These funds will invest differently, depending on the type of pension chosen (life or scheduled), in instruments such as government securities, bank deposits or shares.

How to pay the pensions: “they will never receive less than they received”

Present at the press conference in the Government, Ileana Horvath, director on the private pension sector in ASF, explained how the private pension will be paid.

“When the participant will meet the conditions of retirement, respectively 60 years for the participants in the optional pension funds and between 63 and 65 years for the participants in the private pension funds, they will receive a letter, a notification, which will be presented to them what amount they have in the individual account and which are the payment providers to which they will be addressed.

Ileana Horvath stressed that currently participants in Pillar II have only an act of accession, not a payment contract.

“In that act of accession, it has never been stipulated that they will receive a unique or staggered payment, because at the time the Law 411 and Law 204 there was no law on the payment of pensions. So they will conclude a payment contract, negotiate this payment contract and will choose the best supplier and the best fund, which will be strictly to be strictly. Conditions: that the property right does not disappear and that the heirs will have the right to inherit this pension if the participant will die, to have the guarantee of these payments.

What can you do if you have no heirs?

Pensioners who have no heirs may choose to conclude a life pension.

“In this case, they will have the opportunity to choose a life pension product with a survivor or beneficiary, who can be a person other than the legal heir,” said Ileana Horvath.

Payment funds will reinvest your pension money, which cannot now

The ASF official also explained that the payment funds are distinct from the accumulation funds, from the current funds.

“The payment funds will be set up on the basis of a company contract and will aim to protect the interests of the participants in the sense of ensuring a pension for the life expectancy of each. The payment funds will reinvest the money, which at this time the private pension funds do. Investment yield to those amounts ”, said Ileana Horvath.

The administrators of the pension funds: The new payment law brings a number of advantages to the provisional situation of the present

A reaction came on Friday and from the Association for Private Administered Pensions in Romania (APAPR), which represent the administrators of the pension funds.

The association argues that the new payment law brings a number of advantages for Romanians, compared to the present provisional situation, as follows:

• The accumulated amounts will continue to be invested and produce investment yields, both in the case of scheduled withdrawal funds and in the case of life annuctions. Currently, the withdrawal scheduled for a maximum of 5 years, provided by the ASF rules, does not allow the continuation of the amounts after opening the staggered payments;
• reducing investment risks and volatility, as scheduled withdrawal funds will be able to invest only in fixed income and low risk;
• obtaining an additional income over a long period, corresponding to the inherent role of a pension system, maintaining a flexibility in line with the practice of other states with similar systems: both withdrawing 25% of the total accumulated amount, and the possibility of supplementing the private pension from other savings sources (eg, the use of bank accounts);
• A more advantageous fiscal treatment than the full withdrawal of the amount or withdrawals for periods of up to 5 years, as the default amount for the programmed withdrawal funds is foreseen at the level of the social allowance for pensioners, below the threshold of 3,000 lei from which the income tax and CASS apply.
• balance between the social role – ensuring a minimum income equal to the social allowance for pensioners – and the flexibility offered to participants with higher accumulations, which can benefit from higher pensions, covering a minimum payment period of 10 years.
• The money accumulated in Pillar 2 and 3 remains of the participants and beneficiaries, their right of property being not affected by the draft law in the debate.

The association also said that the draft law was elaborated by the Financial Supervisory Authority (ASF) and agreed with the experts of the Organization for Economic Cooperation and Development (OECD), as part of the process of Romania's accession to this organization of the developed states.

The association also stressed that August 2025 was exceeded the psychological threshold of 1 billion euros at the level of payments already made to the beneficiaries of Pillar 2 and 3 of private pensions.

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