Why it is “worth it” to contribute to a Pillar III pension fund and how to do it

Good bye,

Pillar II has almost all those who are employed with an individual employment contract or pay their own taxes through the Single Declaration.

Pillar III is the optional private pension, that is, you or your employer decide if you want it.

There is also legislation for Pillar IV, but this is only for companies that have money and want to keep their employees close for the long term.

Yes, you are Gigi Popescu and you don’t plan to take any chances in business. You want to be employed all your life, to take care of your health and your family. Well, it would be good to insure yourself in old age with a Pilon III.

The minimum contribution is between 45 and 60 lei, depending on the fund. You can contribute a maximum of 15% of the gross monthly income, but no more than 400 euros equivalent in lei/year. I mean, the most you can put in is 165 lei/month at the moment. If you exceed 165 lei/month, you will no longer be able to obtain the deduction from the total gross income for the amount that exceeds the threshold of 165 lei/month. Be very careful: you must tell your employer that you are putting money into P3 so that they can deduct the amount you contribute to P3 from your income tax or, better yet, have your employer directly transfer the money to the P3 fund that you have chosen .

There are also sly companies that can put them in P3 165 lei/month because they can deduct it from the profit tax. Rather than giving the money to the state, it is better to put it into employee loyalty. This means that your company puts in 165 and you can also put in 165. You reduce the amount from the income tax, the company from the profit tax. Everyone wins.

Gata, bro, ma bag

Let’s say you work for a company/institution/agency that doesn’t put money into P3. what are you doing Well, you choose your own fund because there is no way to make automatic distribution like in P2.

This table shows you where the most registered Romanians are and which funds are big-big or small.

Mno, as you can see, NN and BCR are the largest P3 funds. I, personally, have at BCR. I’m not saying it’s the best. You have to make the choice that suits you. Some funds, such as NN Activ or AZT Vivace, have a higher degree of risk because they have diversified investments. If you are not interested in short-medium term fluctuations, you can get into one of these.

^{I also have BT (My Pension is called the fund} that I was stupid and didn’t realize that I was paying two commissions, I’ll solve it soon and I’m left with only one. I will transfer the BT to BCR. It only needs to be done for 24 months. that there is a condition that transfers from one fund to another without penalties can only be made after 24 consecutive contributions.)

Choosing a good fund can also be done based on the performance (that is, the yield), but you have to keep in mind that no one guarantees you that the numbers will look just as good in the future.

Here you see the returns. If you want the data for several years, you have to go to the ASF website.

I mean, you go in here and see how the P3 evolution looks. AZT Vivace and Raiffeisen are moving best now, as an idea.

All you have to do after choosing your fund is to contact them through a form on their website or an email or a visit to a branch. It’s super simple. If you pay your contributions yourself, then you can set the automatic payment from your bank’s application on a date you prefer and that’s it. Just be careful to put your CNP in the details so that the money is allocated where it needs to be.

Yes, these scumbags take a commission

A simple example shows us that if you deposit 100 lei/month for 25 years, contribute a total of 30,000 lei.

At an annual yield of 6%, you would retire at the age of 60 with approximately 66,267 lei.

The state retains 10% of the total amount when you want to collect Pillar III. Payments (single or staggered) are made if you turn 60 and want the money, if you die (it is given to the heir’s P3 account without taxation, not in hand) or if you get sick and are declared disabled/unfit for work.

The biggest problem with Pillar 3 is like any fund retain 0.2%/month because they manage the money. Based on the calculation above, you lose 1,986 lei, which means you should to take into account 64,281. If you take them out in stages, you can cancel the 0.2% monthly commission because the money will multiply.

Well, now financial experts will tell you that there is a chance that Pillar 3 will not beat the inflation rate or that there is a risk of switching to the euro.

I’m telling you that at 165 lei/month you shouldn’t care. Yes, it’s easy to get into the TVBET ETF through Tradeville (and I really recommend it, if you have the money) or to buy government bonds (which are non-taxable, btw), yes, you’re not doing much with such a small amount.

Pillar 3 does not exist to make you rich in old age. It’s an extra safety net. Make sure you have nothing to regret. At least you will have something to buy your grandchildren’s toys or treats for the dog/cat.

^{PS Leave the damn posts about the politics of the ass because I’m bored of how much you debate here for nothing. The impact of Reddit was seen locally. It was quite a fas. Stop thinking that you are changing something. The country is full of pensioners and state employees who vote with whoever they want.}