The new pension law, under debate
The new pension bill has been launched for public debate and the Romanian government would like it to be adopted in an emergency procedure.
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Corina Cristea, 02.11.2023, 14:00
Having the approval of the ruling coalition in Romania made up of the Social Democratic Party – PSD and the Liberal Party – PNL, the new pension draft law has been launched this week for public debate, and the government says it would like it to be adopted in an emergency procedure by November 20. The principles underlying the bill are contribution, stability in the labor field, equity and solidarity, the government representatives say, who pointed out that pensions will increase twice next year for most of the people who have ended their activity. Thus, from January 1, all pensions will be increased by 13.8%, according to the average annual inflation rate, with a second increase most likely to take place on September 1. Then, growth will be differentiated in order to eliminate inequities, the PM Marcel Ciolacu said.
At the same time, in the next six months, all pensions will be recalculated according to a new formula based on the number of points achieved by each beneficiary, according to the contribution principle, a mechanism for indexing pensions that is clear and correlated with economic realities. Following the recalculation, a large part of pensioners will benefit from higher pensions and no pension will decrease, the government representatives have assured. All the projection is for the future, it is out of the question that anyone loses any money after the recalculation, says the prime minister.
According to the new pension law, the minimum contribution period will be 15 years and the maximum period 35 years. Stability in work will be additionally rewarded, i.e. the contribution period achieved over 25 years will be adjusted with additional points for seniority, and the non-permanent contributory increments will be taken into consideration when calculating the pension. Also, women with several children will benefit from a reduction of the standard retirement age of three years and six months. As of 2035, the standard retirement age will be 65 for both men and women, and to achieve this measure, the standard retirement ages will be gradually increased.
Early retirement can be requested at most 5 years before reaching the standard retirement age, by people who have completed the full contribution period. At the same time, the persons insured in the public pension system who meet the conditions for registration for retirement can opt for maintaining the job, annually, with the consent of the employer, until reaching the age of 70. As to pension expenses, the focus will be on maintaining them as a share in the total value of the GDP, the government says, so that the medium and long-term sustainability indicator should not indicate a high risk. The ruling coalition wants the new pension law to take effect on January 1, 2024, so the bill might be approved next week by the executive and then sent to parliament for debate and adoption. (LS)
