Pillar 2 from 2027: what amount you can withdraw immediately and how the rest of the money is paid out

The Financial Supervisory Authority (ASF) has put forward a draft Regulation for public consultation, setting out the rules for the payment of funds from Pillar II private pensions, effective from 2027. The document implements the provisions of Law no. 2/2026 and affects over 8.5 million participants in these funds.

The new rules govern how accumulated amounts are calculated, the methods for withdrawing funds, the types of pension available, transfers between funds, and the rights of beneficiaries.

How accumulated funds are transferred

Once a participant meets the retirement conditions and requests access to their funds from the administrator, several steps follow:

• The administrator converts fund units into cash and communicates the total accumulated value, with no charges for this transaction.
• After the payment contract is signed, the amount is transferred to the chosen payment fund within a maximum of 5 working days.
• The transfer is exempt from tax, penalties, or fees, and all banking costs are borne entirely by the administrator.

One-off withdrawal: up to 30% of funds

Participants may request, on a single occasion, a cash advance before they begin receiving monthly payments:

• The maximum advance is 30% of the total value of the transferred asset.
• For example, for a fund of 100,000 RON, the maximum possible advance is 30,000 RON, with the remaining 70,000 RON paid in monthly instalments.
• The entitlement to this 30% advance applies separately to each private pension account held by the participant.

How the monthly pension is paid

The remaining funds after any advance are paid monthly, either by postal order or bank transfer. The law provides for two options:

1. Programmed withdrawal

• Monthly instalments are, as a rule, equal to the social allowance for pensioners and are updated annually.
• Payments are spread over a period of at least 8 years.
• The total amount paid must be at least equal to the initial asset, minus any statutory fees.

2. Lifetime pension

• Three options are available: an individual lifetime pension, a pension with a survivor benefit component, or a pension with a guaranteed payment period.
• The contract clearly specifies the initial value, the indexation method, and the persons designated as beneficiaries.

What happens to the funds in the event of death

• For programmed withdrawal: the outstanding unpaid balance is paid to the legal heirs in a single lump sum.
• For a lifetime pension: the financial entitlements depend on the contractual terms, specifically whether a guaranteed payment period or a survivor benefit component was included.

Mandatory contract requirements

The ASF Regulation requires providers to be more transparent towards participants:

• Administration fees may not be increased during the term of the contract.
• Participants with multiple accounts may choose to consolidate them or keep them separate.
• The contract must clearly set out the dispute resolution procedure, the method of taxation at source, and the conditions for transferring between funds.