Preliminary assessment of the second payment request of Romania

• - Preserve the independence of pension managers in determining their investment strategy

Law 411/2004 of 18 October 2004, on privately managed pension funds, as republished in the Official Journal No. 482 of 18 July 2007, preserves the independence of pension managers in determining their investment strategy by requiring the administrator/manager of private pension funds to draw up an investment policy statement including the investment strategy (Chapter IV, Article 24). A different person, the investment manager, is responsible for deciding the investments of the pension fund’s assets within the limits of the powers and in accordance with the asset investment strategy established by the private pension fund manager (Chapter IV, Article 23). Therefore, Law No. 411/2004 ensures that private pension funds administrators/managers are independent in establishing the investment strategy.

Regulate future adjustments to the private pension fund investment regime that contribute to a flexible set-up that encourages pension managers to properly diversify their portfolios in order to achieve fair risk-adjusted investment returns. The sole Article of Law 104/2023 of 13 April 2023, approving Government Emergency Order No. 174/2022 amending certain legislative acts in the field of private pensions, published in the Official Journal No. 319 on 13 April 2023, specifies that the Financial Supervisory Authority shall regularly examine the possibility of drawing up regulations on the investment of assets of privately managed pension funds to help make the investment framework more flexible, with a view to encouraging appropriate diversification of pension fund assets in order to achieve fair risk-adjusted investment returns. Increase companies’ access to the capital market, to facilitate the listing of new issuers and to make greater use of private sources of funding, including pension fund assets. This would lead to

a better investment ecosystem for pension managers and increased opportunities for a proper diversification of pension fund portfolios. By allowing investments in unrated corporate bonds and corporate bonds with a non-investment grade rating only if these are admitted to trading, Article I(4) of Financial Supervisory Authority rule No. 2/2021 of 29 January 2021, amending and supplementing Rule No. 11/2011 on the investment and valuation of assets private pension funds, approved by Judgment Private Pension System Supervisory Commission No. 22/2011, published in the Official Journal No. 130 of 8 February 2021, encourages the listing of Romanian companies in capital markets in order to benefit from private pension funds’ investments and facilitates the listing of new issuers, since corporate bonds of new issuers are typically unrated. This provision also allows companies to make greater use of private sources of funding, by increasing the number of companies accessing private pension funds investment.

Commission Preliminary Assessment: Satisfactorily fulfilled

Related Measure: Increased capacity to undertake investments in health Number: 355 infrastructure Name of the Milestone: Entry into force of the legislative framework establishing the National Agency for Infrastructure Development in Health (ANDIS) Qualitative Indicator: Entry into force of the legislative framework Time: Q2 2022 establishing the National Agency for Infrastructure Development in Health

40