Graduation thesis - the private pension system in romania

ACADEMY OF ECONOMIC STUDIES BUCHAREST

FACULTY OF BUSINESS ADMINISTRATION

(ENGLISH TEACHING)

Graduation thesis

THE PRIVATE PENSION SYSTEM IN ROMANIA

Introduction

Chapter 2

History of the Pension System

The history of the pension system begins back in the 1880s, when Bismarck promoted the adoption of social legislation in Germany.

Bismarck's social legislation

Otto Eduard Leopold von Bismarck, Count of Bismarck-Schönhausen, Duke of Lauenburg, Prince of Bismarck, 1815 - 1898, was a Prussian and German statesman of the 19th century. As Minister-President of Prussia from 1862-1890, he oversaw the unification of Germany. From 1867 on, he was Chancellor of the North German Confederation. When the second German Empire was formed in 1871, he served as its first Chancellor, gaining the nickname 'Iron Chancellor'. As Chancellor, Bismarck held an important role in German government and greatly influenced German politics during his time of service.

The 1880s were a period when Germany started on its development. The Social Democratic, National Liberal and Center parties were all involved in the beginnings of social legislation, but it was Bismarck who established the first practical aspects of this program.

The adoption of the first German social insurance laws constituted Bismarck's response to the growing movement of labor demands that accompanied the fast industrialization of German economy during the second half of the nineteenth century. In order to cut the ground from under the Social Democrat Party's feet, the German chancellor decided to develop an active social policy that would bring together the State and the working class: "The policy of the state should cultivate the view also among the propertyless classes of the population, those who are the most numerous and the least educated, that the state is not only an institution of necessity but also one of welfare. By recognizable and direct advantages they must be led to look upon the state not as an agency devised solely for the protection of the better-situated classes of society but also as one serving their needs and interests." (Speech made by Bismarck in the Reichstag in 1881; quoted by Pinson, 1966, p.241).

With this aim in view, Bismarck carried out in less than a decade three important laws that established a full compulsory insurance system against the main threats: sickness, industrial accident, old age and invalidity.

Bismarck opened debate on the subject on 17 November 1881 in the Imperial Message to the Reichstag, using the term applied Christianity to describe his program.

Bismarck's program centered on insurance programs designed to increase productivity, and focus the political attentions of German workers on supporting the Junker's government. The program included Health Insurance; Accident Insurance (Workman's Compensation); Disability Insurance; and an Old-age Retirement Pension, none of which were then currently in existence to any great degree.

Old Age and Disability Insurance Bill of 1889

The Old Age Pension program, financed by a tax on workers, was designed to provide a pension annuity for workers who reached the age of 70 years. At the time, the life expectancy for the average Prussian was 45 years. Unlike the Accident Insurance and Health Insurance programs, this program covered Industrial, Agrarian, Artisans and Servants from the start. Also, it was accepted the principle that the Federal Government should contribute a portion of the underwriting cost, with the other two portions prorated accordingly. The Disability Insurance program was intended to be used by those permanently disabled, the program being supervised by the State or Province directly.

The pension program developed by Bismarck was implemented by many countries in the world. The system was also implemented in Central and Eastern-European countries, such as: Russia, Bulgaria, Czech Repubic, Poland, Hungary, and Lithuania. This pension program was called pay-as-you-go system, with defined benefits, as the contributions were paid during all the active period of a person and at retiring, the persons received a pension determined by the state. During time, these pension systems didn't respond to the needs of the population and the whole system had to be reformed.

A new pension system was then developed in Chile, in the 1980s, based on defined contributions.
The Chilean model

On the 4^th of November 1980, Chile, under the leadership of José Piñera, Secretary of Labor and Pensions under President Augusto Pinochet, implemented with the collaboration of his team of Chicago Boys (a group of libertarian economists influenced by the Chicago School of Economics of American economist Milton Friedman) the first comprehensive change of a state-run, defined-benefit pension scheme to a defined-contribution system managed entirely by the private sector (by pension management companies called 'AFP'), under the supervision of a dedicated government agency, the Superintendency of AFP.

The Chilean system of personal retirement accounts started operating on the 1^st of May 1981. Civilian workers covered under the previous defined-benefit plan had the choice of opting-in to the new system or of remaining under the previous system, such election being irrevocable. Workers hired after the 1^st of January 1983 must join the new system. Today 97% of civilian salaried workers are officially in the private system. According to the Superintendency of AFP, the system had accumulated USD $100 billion at the 30^th of October 2007, an amount equivalent to 70% of the GNP of Chile.

The Chilean system provides that all civilian salaried workers must contribute 10% of their salary to a privately run pension fund, that sum being remitted on their behalf by their employer. The worker can choose one of six private pension administrators and change at will. Self-employed individuals may contribute voluntarily, and salaried workers can also enhance their pension through additional voluntary contributions. The Chilean armed forces and police remained cover by separate defined-benefit plans.

The Chilean pension 'model' has been implemented until now by 30 countries. Many of them have combined this new defined-contribution system with their former state-run, defined-benefit pension schemes. Among these 30 countries are: Mexico, Colombia, Peru, El Salvador, Poland, Hungary, Slovakia, Kazakhstan, Sweden, and Hong Kong and starting from 2007 Romania also.

2.2 The Private Pension System in Central and Eastern-Europe by countries

Pensions represent a central point within the frame of changes emerging in the social security policies after the year 1990. Most of the countries in the region tried to find satisfactory solutions as an answer for the aging crisis as well as for the financial crisis faced by the pension systems.

Although reforms are being developed in many countries of the world, there are some commom characteristics and supplementary difficulties that characterize economies in transition.

First of all, they have in common a past characterized by extended public systems, as the PAYG type with defined benefits. The pension systems from the period characterized by a centralized economy, generally offered high benefits, having a high coverage rate, offered special treatment for some categories of people and imposed a rather low pensioning age limit. During time, the system became less and less efficient, culminating with the financial crisis of the pension funds.

Secondly, the countries passed through economic and institutional transformation that deepened the tyical problems of the pension systems reforms. A major problem was represented by the shortages of the financial markets and institutions, as transition economies, usually, don't have stable stock exchange markets, adequate financial instruments or sufficiently regulated environments.

The majority of the economies in transition needed to start with rationalizing the existent system; this process is called reform in steps. The main measures that have been taken by the countries in transition were increasing the pensioning age, modifying the indexing formula, reducing benefits and consolidating the tax collection capacity. These steps taken by these countries represented a preparatory stage before implementing the multi-pillar pension system.

The Czech Republic has introduced the first private pensions 10 years ago, without having a mandatory character back than, and afterwards has introduced the voluntary pensions. In the region, there already exist precedents in this direction. This way, Hungary was the first country to introduce, in 1998, a mandatory private pension system (pillar II), with individual accounts.

The problem which arose was the costs of transition. Transferring one part of the contribution which should have been received by the public pension system to the private administrators created a big and costly 'hole' in the public pension system - in average 1-2% from the Gross Domestic Product for 50 years.

In Hungary, after 6 years from the introduction of the mandatory private pension system, the profitability of the funds was negative, respectively 3.4% per total for the 18 companies administrating private pension funds. The lack of performance of the pension funds in Hungary had as one cause the legislation and the way the system was regulated and supervised. Since the beginning, the private pension funds have administrated the dividends little above the inflation, but they were not allowed to invest in high level of risk instruments, which would have brought higher dividends.

At the end of 2006, the number of participants for Pillar II was 2.6 million, and 18 companies were administrating 16 billiard euros. The most important player on the private pension market in Hungary is OTP Private Pension Fund, having a market share of 29.03 %.

Poland has adopted Pillar II in 1999, and in 2006 there were 12.4 million participants to this system, and the 15 companies subscribed were administrating 30 billiard euros.

The new Polish system has a series of basic characteristics, described in the table below:

Table 1: Basic characteristics of the Polish pension system:

Source: OECD, 2001: Occasional papers No. 54, pg. 27-29

Bulgaria

The pension reform in Bulgaria started in the 1994, by launching and regulating the voluntary pension funds (Pillar III). In this moment, the Bulgarian pension system is based on 3 pillars, as stated by the World Bank: state pensions (pillar I), mandatory private pensions (pillar II) and voluntary private pensions (pillar III). Bulgaria has introduced Pillar II, the mandatory pensions for all types of employees, in 2002.

Moreover, the pension reform in Bulgaria has modified the minimum pensioning age, from 60 to 63 for men and from 55 to 60 for women.

In the present, in Bulgaria there are 24 private pension funds operating on the market, administrated by 9 private pension fund administrators: Doverie, Saglasie, DSK-Rodina, Allianz-Bulgaria, ING PIC, CKB-Sila, Lukoil-Garant, DZI-PI and Toplina.

The data at the end of the second semester of 2006 were showing a high level of concentration of the private pension funds on the Bulgarian market, in the sense that the 2 most important administrators of the private pension funds were owning together 67% of the market's assets and 63% from the total number of participants to the private pension funds in Bulgaria.

The private pension funds in Bulgaria own, after the 3^rd quarter of 2006 net assets valuing 704.691.206 euro, after almost 17 years from launching the pension reform in Bulgaria.

The level of the contributions to the social security budget for the Bulgarian contributors, in 2006, was of 23% from the incomes, out of which 19% was sent to the state pensions and 4% to the private pension funds (pillar II and III).

The employee covers this contribution in proportion of 2/3 and the employer pays the rest of 1/3. It is expected that until 2009 the employees and the employers to contribute equally, 50-50%. Moreover, in time, the percentage from the social security budget will be transferred to private administration, within pillar II.

Slovakia has introduced Pillar II in 2005, after the introduction of the voluntary pensions in 1997. In 2006 1.1 million people were participants to Pillar II, and there were 6 companies administrating 710 million euros.  

2.3. The pension system in Romania

1. Short history of the pension system in Romania

Romania, as well as most of the other European countries, faces the same problems as the developed countries: the ageing of the population and a low fertility rate.
In 1989, the year when the Ceausescu communist regime came to an end, Romania had a PAYG pension system which covered all the employees. In the following years, the system was abused and a lot of employees took early retirement instead of unemployment. For social protection reasons, the benefits provided by the pension law issued in 1971 were modified several times. But in 2000 a new law (Law no. 19) for the public pension system was approved by the Parliament, which introduced some reforms in the system: a slow increase of the retirement age, for women from 57 to 60 in 2014 and for men from 62 to 65 also in 2014. Both for men and women, the number of years of contributions, in order to qualify for the minimum pension, was raised from 10 to 15 years in 2014. The full contribution periods have increased to 30 years for women and 35 years for men, both in 2014. The main benefits provided by the pension system were for old age, disability and survivors. But the law also introduced some social benefits paid out of the public pension fund, like indemnities for maternity leave, indemnities for recovery after work accidents and holidays for retired persons. Also the farmers, who never contributed to the system, were granted the right to receive a pension for old age.

2. The pension reform

The reform of the pension system has a long history in Romania. Almost 10 years of discussions have passed without any concrete results. The initial project started in 1996, when a steering committee was established, including the representatives of all main institutions: National Bank, Ministry of Finance, Ministry of Labour, and National Commission of the Capital Market. The mission of the steering committee, having the support of the World Bank and using international consultancy, was to reform the public pillar and to introduce a three-pillar system based on the World Bank model: 1. a reformed PAYG system; 2. a mandatory second pillar, defined contribution, funded and privately managed, for a large part of employees; 3. a voluntary pillar, including a saving product for pension.

The PAYG system was reformed through the Law No. 19 approved by the Parliament in 2000. The work of the steering committee has been concluded through a draft for the second pillar, issued by the Government as an emergency ordinance in November 2000. The coalition which was ruling the country in the period 1996-2000 lost the elections and the new winning party, social-democrat oriented, revoked the emergency ordinance in January 2001. The main reason was that such an important law must be discussed in the Parliament and not issued as an emergency ordinance.

New legislation for the second and third pillar was approved by the Parliament in the autumn of 2004. But in the spring of 2004 the main insurance companies carrying on life insurance business in Romania, together with main asset managers, have established the Romanian Association of the Private Pensions Providers (www.apapr.ro). The main aim of the association was to be a partner of discussions for the Government in drafting the legislation for private pensions. Unfortunately the Government in force in 2004 was not taking into consideration the comments of the association. The result was that the members of the association have rejected the legislation and no member has made an application to be a private pension provider.

In November 2004 there were new elections, and the social-democrat party which was ruling the country lost the elections. The new coalition, liberal and social-democrat, suspended the legislation for the third pillar and proposed to re-discuss the whole legislation for the private pension system. A new draft for the third pillar was proposed by the National House for Pensions, after discussions with the members of the association. Unfortunately this draft was not accepted by the association's members, due to the following reasons: . the existing life insurance products (endowments or unit-linked) do not qualify for a pension product in the third pillar; . there is only one product, individual account with defined contribution, which is included in this pillar; . the guarantee a provider must offer at the end of the administration of the accounts: capital payments indexed with inflation plus 1%.

3. Description of the pillars

After many years in which the pension system was administrated exclusively by the state, in 2007 the private pension was introduced in Romania also. The mandatory and voluntary private pensions represent the next step in the evolution of the pension system in Romania and imply reforming the whole social insurance system in Romania.

Conformingly with the classification of World Bank, the pension systems have 3 pillars:

- pillar I - public pension, the pay-as-you-go system, with defined benefits;
- pillar II - private pensions with defined contributions, mandatory for the persons up to a certain age;
- pillar III - pensions with voluntary contribution, privately administrated, based on individual accounts.  

The pension system is structured on three pillars:

► Pillar I - State pensions

As a decrease in the last 17 years in the number of employees who work and pay their social insurance contributions from 8.1 million (in 1990) to 4.6 million (in 2006), at the moment the state pension has an average value of only 380 RON per month. Nowadays, at the moment of retiring there is only a reduction of the income, the level of the expenses not decreasing almost at all, this making it difficult to maintain the life standard to which each was used to.

The pension for old age was established based on the contributions paid during the whole active life and not linked to the salaries in the last 5 years of activity: each year the contributor received a number of points as a ratio of her/his salary and the average national salary, established by the National Institute for Statistics, capped to a maximum of 5 points. At retirement age, the sum of the points is divided by the number of contribution years. The amount of the pension is obtained by multiplying the number of points by the monetary amount of the point, established by the National House of Pensions according to the balance of the pension fund in that year. The monetary amount of a point cannot be less than 30% and higher than 50% of the national average wage used to establish the budget of the pension fund in that year. Each year the pensions are indexed with inflation, though in some years this requirement was difficult to achieve.

► Pillar II - Mandatory private pensions

For the implementation of the private pension system, the last 3 years, 2005-2007, have been decisive for the reform. During this period, by elaborating Law no. 204/2006 regarding voluntary pensions and by modifying and completing Law no.411/2004 regarding private pension funds, there has been established a legislative frame which regulates the organization and functioning of the entities on the private pension market, as well as prudentially supervises the administration of these funds.

Pillar II is characterized by the redirection of a quota from the personal social insurance contribution, paid monthly to the public system, to private pension funds. The contributions are paid on the whole period when the person is contributor in the public system too (there is no possibility of exiting from the private pension system, but it is permitted the transfer between funds).

The private pensions are mandatory for those aged up to 35 years and optional for those with ages between 35 and 45 years.

The Administrator of a pension fund is a newly founded pension company, with a share capital of at least 4 million Euro, authorized for this activity by CSSPP - the competent authority in supervising and controlling the private pension system.

The investments of these funds are done conformingly with classes and percentages established by law.

According to the law, the administrators are obliged to constitute a guarantee fund, but the law establishes other guarantee elements too, such as: separating the fund's assets of the administrator's assets, the depositary of the assets, the financial auditor, the creation of technical provisions.

The right for private pension starts in the moment of pensioning, according to the standard age determined by the public system. The total sum as private pension can't be smaller than the value of the contributions paid, diminished with the transfer penalties and legal commissions.

In the case of the persons whose personal net assets on the date of retirement are too low in order to receive a private pension, or of the persons pensioned because of invalidity who are not able re-starting their activity, according to the law, there will be done a single payment or annuities paid for a period of maximum 5 years.

A second important moment after the reform in the pension system and the creation of the 3 pillar system has been the founding and start of the activity of the Supervisory Commission of the Private Pension System.

C.S.S.P.P. is the specialized and autonomous public authority dedicated to inspecting and regulating the functioning of the private pension system, under the control of the Romanian Parliament, founded through the Emergency Ordinance no.50, from the 9^th of June 2005, approved by the Law no. 313 from the 10^th of November 2005.

The Commission's Council

C.S.S.P.P is governed by a 5 member Council, named by the Parliament, including the President of the Council and the Vice - President. The executive management of C.S.S.P.P is provided by the Executive Manager, named by the Council of the Commission.

Mission
The mission of this state supervisory body is:

to protect the interests of those affiliated to the Pension System, by assuring an efficient functioning of this system.

authorizing and supervising the activities carried out in the Pension System.

Vision
A stable, reliable pension system that:

Will ease the pressure on the social security public budget

Stimulating economic growth through investing the pension fund money

Developing the securities market

Creating new jobs, decrease on the unemployment phenomena

Main functions:

Authorize, suspend, or withdraw functioning licenses from Pension Companies, Annuity Providers and Depositories, where necessary,

Overall surveillance of the private pension system,

Control of all the activities carried out in the Private Pension System,

Insure the payment of the contributions by the employer to the Pension Funds,

Issue regulations regarding the organization and operation of the Pension System, to issue and/or comment on legislative projects/initiatives regarding the supervision of the Private Pension System field:

Regulate the investments of the Pension Funds,

Protect the participants of the Pension Funds,

Withdraw licenses of the Administrators of the Pension Funds,

Investigate the source of the paid - in capital by the founders,

Supervise the Reserve fund,

Supervise the Custodians and Asset Managers of the Pension Funds,

Asses the actuarial cost methods,

Plan and define the control procedure, the internal procedure of solving the notifications and contests,

Control the organization, book-keeping and administrating the assets and liabilities of the Pension Funds, separately from the administrator's,

Verify the existence at every administrator in part, of very clear administrating procedures and book-keeping procedures, and also a right mechanism of internal control,

Drafting and updating the Public Registry

Approve the Asset Manager, who will protect the interests of those affiliated and of the beneficiary of the Pension Funds' Assets,

Inform and educate the people about the private pension system.

The capitalization pension components, both for the mandatory and voluntary private pensions, are with defined contribution - DC.

Private pension funds, regulated by Law no. 411/2004, republished, with the subsequent modifications and completions, fall in the category of Pillar II, representing the privately administrated component, with capitalization, of the pension system, in which a part of the social security contribution from the public system is directed to private pension funds mandatory or optionally, depending on the participants' age; this is similar with the system other EU member states have, such as: Poland, Lithuania, Leetonia, Slovakia or Slovenia.

In the view of improving the financial situation after retiring, the employees with ages up to 35 years are obliged to choose, during the campaign lasting 4 months starting on the 17^th of September 2007, a mandatory pension fund to which to adhere. During these 4 months they had to choose a pension fund to which to contribute, after which those who haven't chosen a pension fund have been randomly distributed by the Supervisory Commission of the Private Pension System to the pension funds on the market. The participation to a private pension fund is mandatory for those up to 35 years and optional for those between 36 and 45 years (these having just the chance of adhering during the campaign period, 17^th of September 2007- 16^th of January 2008).
This type of pension permits the redirection of 2% from the social insurance contribution of the gross salary to a private pension fund. In time, this percent will grow by 0.5% yearly up to 6% in 2015. The employee won't pay anything more in order to have a higher pension than the state could afford offering.

Payment of the private pensions

The accumulated personal asset is used only for obtaining a private pension, as the situation in member states such as: Leetonia, Poland. The exceptions, respectively the cases where there is the possibility of receiving a fix sum of money as a single payment or multiple payments, are foreseen by the 2 normative acts which regulate the domain, as for example in Hungary.

In the private pension system from Romania, there are no fore payments, fix sums from the accumulated asset before the age of pensioning.

The payment of the pension will be done by a private pension supplier, and the pension will be calculated based on actuarial calculations and the personal net asset, taking into consideration the sum accumulated from the contributions and their investment done by the administrator of the pension fund.

WHO IS COVERED AND WHO ISN"T

On the period of indemnified unemployment, the authority which manages the unemployment fund budget transfers the social security contribution to the social security budget, and correspondingly, the contribution quotas will be transferred to the private pension funds to which the persons have adhered (for the period they are indemnified).

Fiscal treatment

As in the majority of the member states, the fiscal treatment of the 2 types of private pensions in Romania is of EET type (Exempt, Exempt, Taxed, respectively: the contributions - exempt, the investments - exempt, the pensions - taxed).

Therefore, the contributions to the private pension funds - pillar II, as part of the individual contributions to the social security system owed to the public pension system are not taxed.

The level of taxes and commissions

The limits of the commissions are established by law and the norms elaborated by CSSPP and are compulsorily presented in the pension scheme prospectus.

For pillar II, the participant pays the administration commission formed of 2 parts: a quantum from the contributions paid, but not more than 2.5%, on the condition that this deduction is done before converting the contributions into fund units, and a percentage from the total net asset of the private pension fund, but not more than 0.05% monthly, established in the pension scheme prospectus. Similar situations are found in other EU member states such as: Leetonia, Poland, Slovenia and Slovakia. Moreover, the expenses regarding the financial audit activities of the pension fund are covered also from the respective fund. The other expenses are covered by the administrator.

► Pillar III - Voluntary private pensions

Appeared as a completion of the state and mandatory private pension, there is also the solution of voluntary private pension, system which entered into force on the 1^st of May 2007 and will be financed from the supplementary contributions, being offered for the persons up to 52 and half years old. A person may contribute to this system with maximum 15% of the gross income and may benefit of a pension when makes 60 years. In the moment of contribution, this type of pension is fiscally deductible both for the employer and the employee (up to the limit of 200 Euros yearly for each).

17^th of September 2007: The launching of the private pensions

On Monday, the 17^th of September 2007, Mr. Mircea Oancea, the President of the Supervisory Commission of the Private Pension System, together with Mr. Doru Frunzulica and Mr. Stefan Prigoreanu, members of the Council of CSSPP and Mr. Cristian Rosu, General Director of CSSPP, have participated at the launching of the private pensions, organized by 'Ziarul Financiar'.

The event has been honored by the presence of Mr. Traian Basescu, the President of Romania, who officially opened the launching of the private pensions in Romania.

Mr. Mircea Oancea has presented the actual stage of the implementation of the private pensions - pillar II, and the efforts of CSSPP for the development of the private pension market, throughout one and a half year from the organizations' founding.

The Minister of Economy and Finance - Mr. Varujan Vosganian and the Ministry of Labour - Mr. Paul Pacuraru have also participated at the event.

3. Case study - OTP Fond de Pensii

1. Competitors

On the market of the private pension system, 18 pension funds have been created and authorized by the Supervisory Commission of the Private Pension System until and even after the beginning of the initial adherence campaign.

The competitors on the market of private pension funds, pillar II, during the campaign have been:

1. ING FOND DE PENSII S.A. - authorized on the 25.07.2007

2. AVIVA SOCIETATE DE ADMINISTRARE A UNUI FOND DE PENSII PRIVAT S.A. - authorized on the 25.07.2007

3. ALLIANZ-TIRIAC PENSII PRIVATE SOCIETATE DE ADMINISTRARE A UNUI FOND DE PENSII ADMINISTRAT PRIVAT SI A FONDURILOR DE PENSII FACULTATIVE - authorized on the 25.07.2007

4. OMNIASIG PENSII-SOCIETATE DE ADMINISTRARE A UNUI FOND DE PENSII ADMINISTRAT PRIVAT S.A. - authorized on the 01.08.2007

5. INTERAMERICAN SOCIETATE DE ADMINISTRARE A UNUI FOND DE PENSII PRIVAT S.A. - authorized on the 01.08.2007

6. PRIMA PENSIE FOND DE PENSII S.A. - authorized on the 01.08.2007

7. AIG FOND DE PENSII S.A. - authorized on the 01.08.2007

8. BT AEGON FOND DE PENSII S.A. - authorized on the 03.08.2007

9. GENERALI FOND DE PENSII S.A. - authorized on the 03.08.2007

10. BRD FOND DE PENSII S.A. - authorized on the 08.08.2007

11. OTP FOND DE PENSII S.A. - authorized on the 14.08.2007

12. BCR ADMINISTRARE FOND DE PENSII S.A. - authorized on the 21.08.2007

13. BANCPOST FOND DE PENSII S.A. - authorized on the 05.09.2007

14. KD FOND DE PENSII S.A. - authorized on the 11.09.2007

15. MARFIN - FOND DE PENSII S.A. - authorized on the 14.09.2007

16. AG2R FOND DE PENSII S.A. - authorized on the 14.09.2007
17. MKB ROMEXTERRA FOND DE PENSII S.A. - authorized on the 14.09.2007

18. ZEPTER FOND DE PENSII S.A. - authorized on the 09.10.2007

2. OTP Group Presentation

OTP Group is one of the most important financial groups of the Central and Eastern Europe which operates in Hungary, Montenegro, Croatia, Bulgaria, Russia, Ukraine, Slovakia, Serbia and Romania.

OTP Group operates in the area by means of its almost 1,500 branches with the support of a team of more than 27,000 employees who serve over 11 million customers.

The value of the shares has increased more than 70 times since the initial offer of 1995.

The strategy of OTP Group is oriented towards the creation of a financial group around every bank from the countries in which it operates.

The process of building up a financial group around the existing banks has already made progresses in countries such as Bulgaria and Slovakia, where OTP Group holds not only credit facilities institutions but also insurances and leasing companies.

OTP Group is now present both on the market of the mandatory funds as well as on the market of voluntary funds, having an experience in the field of more than 10 years and holding in Hungary a market share of 25%.

OTP Private Pension Fund Hungary was established in 1997 as the first private pension fund on the Hungarian market. The success of the fund is indicated by the fact that it has kept its market leader position since the end of 1998. On the 31^st of December 2007 it had 805 thousand members and total assets amounting to HUF 516 billion.

OTP Private Pension Fund is one of the most creditable members of the domestic private fund market. Its account is managed by the founding parent company, OTP Bank Ltd. which provides a firm background for the Fund and its members.

The assets of OTP Private Fund are managed by OTP Fund Manager Ltd., which has the appropriate professional knowledge and track-record to guarantee a pensioner life of ease for its members. In 2007 the Fund reached 6.69% (2003-2007: 9.89%) net return on assets.

Besides many other factors the safety of a pension fund is guaranteed by appropriate technical and administrative support. Book keeping and administration of OTP Pension Fund is managed by the biggest pension fund service corporate, OTP Fund Services Ltd.

3. OTP Fond de Pensii Presentation

Within OTP Group Romania, the company authorized by the Supervisory Commission of the Private Pensions System as administrator of a private pension fund is SC OTP Fond de Pensii S.A., with a share capital of 8 million euros.

OTP Fond de Pensii has a network of territorial units with national coverage in order to obtain the best distribution of the offered products.

The mandatory pension fund of S.C. OTP Fond de Pensii S.A. is "OTP Fond de Pensii Administrat Privat".

The purpose for the set-up of the Fund is the long term increase of the invested capital by the investment in a mixed structure of asset classes with different risk and performance profiles as well as by the prudential diversification both between asset classes as well as in the interior thereof, within the limits set out by the law, in order to ensure a private pension for every participant.

General objectives of the business strategy of OTP Fond de Pensii

Penetrating the market of the private pensions and obtaining a market share of 10-15%

Continuous growth of the penetration rate on the market

Attracting, maintaining and extending the market by increasing the number of participants on the segment of mandatory and voluntary pensions, during the first period putting accent on the mandatory pensions

Assuring efficient distribution, adapted to client demands

Continuous growth of the private pension market share.

Main action directions of OTP Fond de Pensii

Developing some competitive products and services

Adapting to the market demand by continuous adjustment of the products and pension schemes

Development and update of the infrastructure, as well as improvement of the quality of the services

Creation and consolidation of the company's image, as a necessity that plays an important role in OTP Group's policy

Presentation of the product:

The product of OTP Fond de Pensii is the private pension, this meaning the sum of money paid monthly, for the whole life, to the participant or to a named beneficiary, as the case, supplementary and distinctly of the pension given by the state.

The product offered by OTP Fond de Pensii cannot differ very much compared to the product of other competitors, as the law is very strict and all the aspects are regulated by the Supervisory Commission of the Private Pension System.

However, what can differ is the investment policy. Every administrator can decide if the fund it will administrate will invest the money in instruments with low, average or high level of risk. Law no.411/2004 regarding the private pension system provides the instruments to be used and the limits in percentage for each instrument, such that the risk level should be kept under control.

The instruments in which investments are made by OTP Fond de Pensii are the ones set out by Law no. 411/2004, and the investment schedule proposed by the Investment Direction and approved by CSSPP, for "OTP Fond de Pensii Administrate Privat" is included into an average risk level, being the following:

The investment rules applied by the Administrator of "OTP Fond de Pensii" for the management of "OTP Fond de Pensii Administrate Privat" are:

Obtaining the highest level of performance, compatible with the risk levels and the accepted investment practices;

Maintaining a long term perspective in defining and assessing the investment strategies due to the long term obligations of the private pension fund;

The investment of the assets shall be made in the interest of the participants and of the beneficiaries, in a manner which ensures the security, quality, the liquidities and the profitability thereof;

The diversification of the assets in an appropriate manner, so as to avoid the excessive dependency on a certain asset, issuant or group of trading companies and risk concentrations on all the assets;

The investments in derived financial instruments shall be performed only to the extent that it contributes to the decrease of the risks of the investment or facilitates the efficient management of the portfolio.

For the management of process, OTP Fond de Pensii SA uses a risk management system based on regulations and procedures in compliance with the principles of OTP Group, an asset management system which controls the limits of exposure on all investment instruments, so as to permanently monitor the limits of the schedule prospect and the ones of Law number 411/2004, regarding private pension funds, with the subsequent modifications and completions.

Another point where the product can differ from one private pension fund administrator to another is the management fees. The range for the fees is also foreseen by law no. 411/2004, and included in the private pension scheme prospectus which is subject to the approval of CSSPP.

The management fees levied by the Administrator are small:

• 2.5% of the contributions paid by the participant before the conversion thereof into fund units;
• 0.05% per month of the total net assets of the Fund.

WHICH ARE THE LEGAL %-ES FORESEEN BY LAW ? ? ?
Sales

The sales activity of OTP Fond de Pensii was accomplished through the private pension brokers. There have been concluded mandate contracts with 7 brokers, but the most important part of the sales was concluded by S.C. OTP Broker de Pensii Private S.R.L. The pension broker has a mandate contract concluded with the administrator OTP Fond de Pensii and was authorized by the Supervisory Commission of the Private Pension System and registered at the Registry of Marketing Agents. It is an intermediary, a consultant and an agent of private pensions.

The employees of the broker are called marketing agents and they also need to be authorized by the Supervisory Commission of the Private Pension System. The agents are allowed to carry out their marketing activity only for one administrator or for only one pension broker, in our case just for OTP Broker de Pensii Private, and further on for the administrator OTP Fond de Pensii.

The broker has requested the authorization of . . . .. marketing agents in order to represent the sales force during the initial adherence campaign.

These employees have been selected from the whole country, from 21 counties, this way being formed a sales network. The marketing agents have been authorized gradually, reaching the final number of . .

There have been created branches throughout the country, each of them having a branch manager. The structure of each branch is as follows:

The target set for the 4 month campaign was of 200 000 participants, representing about 7% from the total market, which at the beginning of the campaign was considered to be approximately 3 million people.

Although OTP Fond de Pensii hasn't achieved its target, it must be mentioned that all the competitors on the market have set much higher targets compared to the results obtained at the end of the campaign, except ING Fond de Pensii, which had a target of 1 million of the population and reached . . . .

Before the beginning of the initial adherence campaign, if we were to add up all the market shares set as target by each competitor, the total of 100% would have been exceed by far. As ING had a target of 30% market share and most of the other pension funds have set a target of 10% - 30% each, the total should have been of almost 200%.

(MAY BE FOUND IN MKT STRATEGY TOO! ! !!! CHECK! !!)

Marketing

I. General marketing policy and objectives

The following aspects are specific to the marketing in the pensions domain:

1.) The pension schemes answer a fundamental need of people: the need of protection for the inactive period. Therefore:

Through the diverse pension schemes, the private pension company seeks to satisfy the need of protection of the employees during the inactive period, through the investments that the company does, but other needs too, such as spare and investment.

2.) The size and structure of the Romanian pension market until now has mainly depended on the following:

- The regulations and laws of the country;

- The economic development level of the country;

- The incomes that the natural persons earn and their willingness to spend on protecting their lives during the inactive period;

- The priority order that each persons attributes to their protection by contributing to pension systems, compared to other needs;

Marketing Policy

Promotion

The relation between OTP Fond de Pensii and the clients needs investing more in communication - the company being in the situation of creating an image based on solidity, transparency, seriousity and ethical principles.

The communication with the target market will have the following main objectives:

- attract the attention of potential clients;

- inform these about the product;

- convince the potential clients about the mandatory character and necessity of acquiring this product.

The promotional activities developed by OTP Fond de Pensii will always use the logo, as a main mean of identification of the company, the quality and value of its products and services; the main promotional activities are the following:

Personal promotion; the contact personnel, which has a determinant role in sales, has a great importance within the promotion policy.

The contact personnel must have the ability to attract new clients, and the information transmitted to the clients must be clear and persuasive, no matter the way the clients have been contacted.

Advertising; this will prepare the public in order to answer favourably to the offer of OTP Fond de Pensii.

The main means of communication used for transmitting the messages are the following: Newspapers, specialty magazines, outdoor advertising, prints (leaflets, flyers, presence in catalogues), Internet etc.

Public Relations; the public relations activity supposes the development of direct contacts with professional environments or influent persons, with the media, opinion formators, civil society associations, NGOs etc.

Means used in the public relations activity:

- editing leaflets;

- organizing manifestations (seminars, conferences, meetings etc.);

- participating in the organization of some meetings of professional associations from the private pensions domain;

- giving interviews;

- publishing articles

- launching news;

- organizing press conferences;

- organizing meetings with the representatives of the media.

Promotional manifestations; creating a favourable image of OTP Fond de Pensii by:

- participating to expositions;

- sponsorship with charity character concentrated on public manifestations (cultural, social, educational activities)

Branding & PR

The visibility of the private pension industry on the financial market

The pension market in Romania is a new market, in ascension, and the estimation for the following years is positive, so we may talk about sporita visibility of the pension companies.

Through visibility and promotion of the pension companies, they build a clear identity, trying to better understand the clients and get closer to them.

Through the communication campaigns, OTP Fond de Pensii aimed to emphasize the characteristics that differentiate the company from others in the domain, in order to confer credibility and a distinct positioning.

The media strategy assured the exposure by advertising but the sustainability of the message, too, while the image campaign at the level of OTP Group had an important role by intensely promoting the company through all the available informing means.

OTP Fond de Pensii wanted its own brand to be sustained by promoting the company's values, meaning through image. The image is conceived/conceputa in the communication process

Public Relations are the ones which actually build the brand. Advertising is an important component in the consolidation of the brand, but even more important is the mediatic/media message, which gives force and generates interest from the public.

The promotion activity was decided to be permanent. The clients' and and business partners' recommendations will always be taken into consideration and it will be shown that OTP Fond de Pensii offers quality services and products and that it makes available to its clients all the experience and knowledge that it owns.

The Public Relations activity within OTP Fond de Pensii is based on the 'Integrated Marketing Communication' concept, respectively integrating and coordinating the marketing activities with those specific to promotion and public relations.

OTP Fond de Pensii understood the importance of developing the activity of networking for sustaining the brand, both by creating and maintaining a 'network of acquaintances', and by being an active presence in the business environment by participating at fairs and expositions, organizing conferences, presentations etc.

General marketing objectives:

1.) Qualitative objectives:

Attracting new clients who use similar products of competitor companies on the market;

Forming an image which inspires credibility and competitiveness.

Quantitative objectives:

Increasing the market share until up to 15%;

Gaining and consolidating a 'Top 10' position among other pension funds on the Romanian market;

Fitting in the marketing budget for the year 2007.

Grupul tinta vizat:

Persoane fizice - Populatia activa atat din mediul urban cat si rural

Cu varsta pana in 35 ani - pensii private obligatorii

- Pentru pensii private obligatorii:

Angajati sub 35 de ani - in jur de 1.550.000

Subscriere obligatorie la PPF-II

perioada de subscriere: 4 luni

realocarea acelor angajati care nu au subscris in cele 4 luni de catre Comisia de supraveghere a pensiilor private (probabil in functie de cota de piata)

fiecare angajator care are angajati sub 35 de ani;

exista domenii de activitate care au un procent mai mare de angajati sub 35 de ani.

II.) Campaniile de promovare a OTP PPF pe anul 2007

II.1. Programul campaniilor din anul 2007

Scopul OTP PPF S.A. in conjunctura prezentata a pietei este de a folosi oportunitatea apartenentei la un grup financiar-bancar puternic pentru a se adresa potentialilor clienti cu o oferta care, integrata in oferta Grupului OTP, sa faciliteze largirea bazei de clienti ai societatii.

De aceea, in anul 2007 este necesara organizarea unor campanii de promovare a vanzarilor si a unor campanii pentru promovarea unor scheme de pensii noi si, in subsidiar, a celorlalte produse de pensii care pot face obiectul interesului clientelei potentiale, persoane fizice si persoane juridice care prin domeniul lor de activitate pot fi interesate de oferta OTP PPF.

Demersurile acestor campanii promotionale initiate de OTP PPF vor avea 3 directii:

1. Lansarea si promovarea pensiilor private obligatorii destinate clientelei, precum si promovarea altor produse de pensii (in special a celor conexe);

2. Promovarea vanzarilor noilor produse si a schemelor de pensii deja existente in oferta OTP PPF pentru sustinerea fortelor de vanzari din reteaua de distributie;

3. Promovarea pe piata, in toate mediile de afaceri si in mediile formatorilor de opinie a imaginii corporative a OTP PPF.

1.)

II.2. Obiective de marketing ale campaniilor din anul 2007

Obiective calitative:

atragerea unor noi clienti care sa utilizeze (noile) produse ale OTP PPF;

diversificarea ofertei OTP PPF S.A., prin introducerea unor noi produse (cu destinatie speciala) care nu se regasesc in oferta concurentei;

formarea unei imagini de companie de asigurari moderna, care ofera o gama diversificata de produse tuturor segmentelor de clienti.

Obiective cantitative:

atragerea in randul clientelei stabile a OTP PPF in anul 2007 a unui numar de peste 250.000 participanti.

incadrarea cheltuielilor campaniilor in bugetul de marketing pentru anul 2007.

II.3. Caracteristicile campaniilor promotionale din anul 2007

Campaniile promotionale vor fi de doua categorii:

campanii de promovare pe piata a noilor produse (inclusiv lansarea oficiala a produselor noi);

campanii de promovare a vanzarilor pentru aceste produse noi si a altor produselor de pensii (conexe) deja existente in oferta companiei la acel moment, desfasurate pe perioade determinate de timp.

Campaniiile propuse vor urmari sa convinga clientela actuala si potentiala, sa apeleze atat la aceste produse noi si moderne de asigurari, cat si la celelalte produse de asigurari conexe aflate in oferta/portofoliul societatii.

De asemenea, prin oferirea unor "produse-pachet" de asigurari constituite dupa nevoile specifice si posibilitatile financiare ale oricarui tip de client, campanile vor urmari:

- sa convinga clientela asupra avantajelor de a avea relatii de colaborare cu OTP PPF;

- sa induca alegerea clientelei pentru produsele noi lansate, prin oferirea unor stimulente/facilitati pe o perioada determinata de timp, cum ar fi:

facilitati la efectuarea platilor privind primele de asigurare;

posibilitatea obtinerii unor cotatii de prima reduse/avantajoase etc.

Avand in vedere previziunile de evolutie a pietei, aceste produse de asigurari vor trebui sa aiba o eficienta financiara cat mai ridicata si un grad de eficacitate cat mai ridicat din punct de vedere al penetrarii pietei, in conformitate cu strategia de dezvoltare pe termen mediu a OTP PPF.

De aceea, campaniile vor presupune promovarea printr-o maniera specifica de prezentare a noilor produse. Astfel:

Prezentarea produselor va fi conceputa din unghiul de vedere al clientilor, permitandu-le acestora identificarea cu usurinta a produselor de pensii - produse care le vor satisface cel mai bine anumite necesitatile specifice de aceasta natura.

Prezentarea produselor va arata ca societatea OTP PPF are raspunsuri adaptate la cele mai diverse necesitati.

Campaniiile vor scoate in evidenta, in mod special, "caracteristicile-avantaje" ale noilor produse de asigurari - mai ales avantajele din punct de vedere al Asiguratului (simplificarea subscrieii, reducerea costurilor, facilitate oferite etc.).

Se vor promova in subsidiar si celelalte tipuri de produse de asigurari (conexe), care se preteaza necesitatilor clientilor persoane fizice si persoane juridice cu domenii de activitate diverse.

II.4. Descrierea de principiu a campaniilor promotionale din anul 2007 DAAAAA

1.) OBIECTIVE: - promovarea pe piata a produselor noi, cresterea vanzarilor si sprijinirea fortelor de vanzari din retea pentru atragerea unei clientele cat mai stabile.

Astfel:

Segmentele din piata tinta catre care se vor indrepta direct actiunile de promovare vor fi selectate din bazele de date avute la dispozitie de catre OTP PPF, primite de la colaboratorii sai si/sau de la Grupul OTP.

Clientii actuali si potentiali vor fi informati periodic despre aceste campanii promotionale, prin intermediul mass media, o data la startul acestora (sau lansarea oficiala) si apoi ulterior, prin tehnici de reamintire.

2.) MATERIALE NECESARE:

baze de date clienti potentiali, corespunzatoare domeniilor vizate;

scrisori nenominalizate tip flayer pentru clientela;

flyere si afise de promovare si informare dedicate campaniilor + afise si flyere publicitare pentru noile produse, prin care clientela este invitata sa se adreseze OTP PPF S.A. pentru a afla despre noile produse oferite de societate;

mesh-uri, panouri stradale, bannere;

campanii de media care vor stimula clientela (actuala si potentiala) sa se adresese OTP PPF S.A.;

mape destinate clientilor continand elemente de prezentare a societatii, cum ar fi: materiale de prezentare a societatii, pliante si brosuri, precum flyere de prezentare a camapaniilor si a noilor produse lansate;

In functie de spatiul avut la dispozitie, in sucursalele si agentiile OTP PPF se va amenaja un "colt publicitar dedicat promovarii", adaptabil unor situatii diverse impuse de specificul campaniilor, cu scopul de a atrage atentia clientilor si vizitatorilor.

3.) COMUNICAREA

Campaniile publicitare de promovare propuse sa se deruleze cu aceste ocazii in anul 2007 isi propun promovarea produselor noi si a produselor conexe acestora, astfel incat rezultatul sa fie accelerarea vanzarilor.

In vederea realizarii acestor obiective efectuarea campaniilor publicitare se va face ultilizand urmatoarelele mijloace de comunicare: tiparituri, presa scrisa, radio-TV, outdoor, participarea la targuri, expozitii, conferinte, sponsorizari, obiecte promotionale personalizate etc.

1. Tiparituri:

Scrisori nenominalizate tip flayer de campanie: - materiale realizate de agentia de publicitate in colaborare cu Departamentul Marketing al OBR si OTP PPF. Vor fi transmise in retea prin 3 metode:

- met. 1. - electronic (prin e-mail) - la adresele de e-mail ale clientilor potentiali din bazele de date utilizate; tot electronic vor fi transmise sucursalelor "bazele de date clienti potentiali" aferente fiecarui judet;

- met. 2. - prin posta - cu plicuri nominalizate, trimise la adresele postale din bazele de date utilizate;

- met. 3. - prin inserturi publicitare in presa scrisa specializata si nationala de mare tiraj.

Aceste scrisori nenominalizate tip flayer de campanie vor avea urmatoarele caracteristici:

dimensiune finita: in functie de necesitati (maxim A4)

material: hartie dublu cretata mata 130 g/mp

tipar: policromie.

Afise si flyere dedicate campaniilor, pentru informare clientelei si de promovare a produselor:

- afise dedicate campaniilor;

- afise de promovare a produselor;

- flyere de informare si promovare a campaniei si a produselor.

Aceste materiale vor fi realizate de agentia de publicitate in colaborare cu Departamentul Marketing al OBR si OTP PPF. Acestea vor fi tiparite la nivel central se vor distribui in reteaua OTP PPF.

Afisele si flyerele vor contine informatii despre noile produse si despre campanii si despre oportunitatea de a apela la oferta OTP PPF S.A. Prin informatia continuta, acestea vor contribui la atragerea si stimularea clientilor. Astfel clientii vor fi informati asupra faptului ca, prezentandu-se la unitatile OTP PPF si ale Grupului OTP vor putea solicita si li se vor oferi produse de asigurari avantajoase.

a.) Afisele vor fi expuse in toate unitatile OTP PPF (sau in unitati ale companiilor care fac parte din Grupului OTP - in functie de specificul fiecarei campanii) si vor avea urmatoarele caracteristici:

dimensiune finita: maxim 50x70 cm

material: carton dublu cretat mat 150 g/mp

tipar: policromie.

b.) Flyerele vor fi distribuite astfel:

direct in retea

- prin posta - cu plicuri nominalizate, trimise la adresele postale din bazele de date utilizate;

- prin inserturi publicitare in presa scrisa specializata si nationala de mare tiraj;

vor fi oferite in mod curent clientilor (inclusiv cu ocazia manifestarilor expozitionale la care sucursalele OTP PPF vor participa).

Acestea vor avea urmatoarele caracteristici:

dimensiune finita: in functie de necesitati (maxim A4)

material: hartie dublu cretata mata 130 g/mp

tipar: policromie.

Autocolante color mate si transparente (diverse forme): - din care:

vor contine logo OTP PPF;

o parte vor contine mesaje specifice campaniilor initiate;

o parte vor contine un scurt text de informare cu scop de promovare adresat cititorilor.

Aceste materiale vor fi realizate de catre agentia de publicitate in colaborare cu Serviciul Marketing. Vor fi tiparite la nivel central si se vor distribui unitatilor OTP PPF in transe.

• Mape pentru clienti, fiecare continand: materialul de prezentare a societatii, brosura si pliante de prezentare a produselor OTP PPF S.A., scrisori nenominalizate tip flyer de campanie, flyere de prezentare a produselor etc..

Aceste materiale se vor distribui unitatilor OTP PPF in transe. Continutul mapelor va fi puse la dispozitia clientilor prin toate unitatile OTP PPF, inclusiv la standuri sau in mape de prezentare, cu ocaziile diverselor manifestari la care va participa OTP PPF sau Grupul OTP.

2. Publicitatea in presa scrisa

Cu sprijinul agentiei de publicitate se va efectua publicitate in presa scrisa utilizand presa scrisa locala, publicatiile specializate in domeniul economic, cele nationale de mare tiraj cele mai cunoscute:

o  specializate in domeniul economic: BURSA, Z.F., CAPITAL, AFACERI I.M.M., BANII NOSTRI, PIATA FINANCIARA, BIZ etc.

o  nationale de mare tiraj: ADEVARUL, JURNALUL NATIONAL, EVENIMENTUL ZILEI, LIBERTATEA, Gazeta Sporturilor, Pro Sport etc.

Materialele publicitare vor fi inserate sau/si se vor publica adevertoriale/machete in paginile redactionale sau de publicitate, avand dimensiuni cuprinse intre 200 cmp - 1 pag.

o  locale: preponderent in cele de limba maghiara din judetele Harghita, Covasna etc.

3. Campanii de outdoor. In functie de necesitati; vor fi realizate de catre agentia de publicitate in colaborare cu OTP PPF si vor fi specifice fiecarui tip de campanie promotionala organizata. In orase si pe drumurile nationale, se vor folosi, dupa caz:

- bannere stradale;

- panouri de afisaj;

- mesh-uri.

4. Campanii prin intermediul posturilor de radio-TV. In colaborare cu agentia de publicitate se vor realiza spoturi audio/video care vor contine imaginea corporativa a companiei si/sau informatii asupra aspectelor principale ce fac obiectul campaniilor derulate.

Aceste spoturi se vor difuza:

- pe posturi nationale/locale cu cea mai mare audienta, la ore de maxima audienta;

- prin instalatiile locale de radioficare operationale din cadrul manifestarilor expozitionale la care OTP PPF participa.

5. Participari la manifestari expozitionale. Vor fi folosite toate ocaziile si oportunitatile favorabile promovarii produselor (in special a celor noi lansate) si a imaginii corporative a OTP PPF.

Prezenta OTP PPF la acestea se va concretiza prin stand propriu (amenajat in colaborare cu agentia de publicitate), sau prin participarea intr-un stand comun al companiilor care fac parte din Grupul OTP

De asemenea, publicitatea facuta prezentei OTP PPF la aceste manifestari va fi facuta pe masura anvergurii fiecarei manifestari, de catre agentia de publicitate.

6. Obiecte promotionale: - personalizate, inscriptionate cu logo OTP PPF.

In colaborare cu agentia de publicitate se vor realiza, in functie de necesitati, diverse tipuri de: pixuri, suporturi de birou, fanioane, stegulete, isigne, brelocuri, etui-uri, portmone, portcarduri, portcardvizit, ceasuri, umbrele, genti, mape, memo-holder, sepci, tricouri, truse set de birou, calculatoare de birou, rame foto, cani, suport de C.D., pad-uri, snur port-ecuson, scrumiere, brichete, pungi, calendare, agende, caiete tip notes, felicitari, etc.

II.5. Estimated budget for 2007: - see annex

Strategia de MK OTP PPF- RO - Anexa - (BUGET 2007).xls

II.6. Feed-back analysis (measuring efficiency)

analysis of the evolution of the number of new clients attracted (per campaign);

implementation of the necessary changes resulted after the analysis done implementarea schimbarilor necesare rezultate in urma acestor analize - ori de cate ori este necesar.

The results of the initial adherence process, Pillar II, 7^th of March 2008

Total of participants in the system of Pillar II at the end of the random distribution process

Persons with validated adherence acts

Randomly distributed persons

3,823,610 persons were validated in Pillar II system of the private pension funds, accordingly to the final update of the Registry of Participants from the 6^th of March 2008

The number of participants in Pillar II system has reached persons after the finalization of the random distribution process of the 332,706 persons who haven't adhered to a private pension fund although had this obligation, or signed adherence acts at more funds.

The 332,706 participants have been randomly and proportionally redistributed between the 18 private pension funds.

Grouping of participants on age criterion, after the random distribution

Grouping of participants on gender criterion, after the random distribution

Women

Men

The results of the validation process of the participants, before the random distribution

Validated adherence acts 3,823,610

Adherence acts validated with reserve after the final update in the Register of participants 212,117

adherence acts have been validated with reserves and haven't enter the random distribution process

The 212,117 who signed adherence acts are not subscribed in the system regarding the payment of the social contribution (according to the data registered in the evidence of CSSPP until the 25^th of January, for the interval September-December 2007)

The results of the private pension funds at the end of the random distribution

The results of the private pension funds at the end of the random distribution process

Annex 1. The organizational chart of OTP Fond de Pensii

The chart below shows the structure of the employees of OTP Fond de Pensii. Their number is relatively small, but it is sufficient in order to fulfill the purpose of the organization, attracting clients and increasing their personal assets, accordingly to the law.

Bibliography

1. https://en.wikipedia.org/wiki/Bismarck#Bismarck.E2.80.99s_social_legislation - bismarck

2. https://w4.csspp.ro/ro/index.php?option=com_content&task=view&id=25&Itemid=37 - raport 2007
3. https://w4.csspp.ro/en/index.php?option=com_content&task=view&id=12&Itemid=27 - despre comisie
4. https://w4.csspp.ro/ro/index.php?option=com_content&task=view&id=56&Itemid=65 - registru csspp
5. Barr N. Reforming pensions: Myths, Truths and Policy Choices: International Monetary Fund, Working Paper 00/139, 2000, www.imf.org