Talks on pensions

The Government this week is due to adopt a law modifying the pension system in Romania

Corina Cristea, 07.06.2021, 14:00

Three months after being drafted by the
Labor Ministry, a law bringing several changes to the pension system in Romania
is expected to be adopted this week by the Government. The new law will not
increase the retirement age, although people will be allowed to work until 70
years of age, should they opt to do so. They will continue to pay social security
contributions and will request a recalculation of pensions when they decide to
retire. The law also bans the aggregation of pensions and state-paid salaries.
Approximately 35,000 people who are currently benefiting from both will have 30
days since the law takes effect to choose one of the two forms of revenue.
There are, however, certain categories exempted from this rule: teachers,
artists, members of the Romanian Academy and MPs, as well as pensioners with
disabilities, maternity and home nurses. The bill, which the Government will
submit to Parliament for debate and approval, comes amidst growing concerns over
the imminent collapse of the pension system. Labor Minister Raluca Turcan
explains.

Right now, we have a 16-billion deficit in
the social security budget. By 2030 an additional 1.8 million people will be
retiring on top of normal figures, as a result of the baby boom of 1966-1969.
As a result, pressure on the public pension system is mounting. Moreover, it is
already facing harsh inequities. The ratio between the lowest and highest
pensions is 1%. Thousands of pensions win litigations against the Romanian
state and we have an obligation to increase contributions to the pension system,
curb inequities and make the system more sustainable and predictable, instead
of serving the interests of decision-makers who increase pensions ahead of
elections. We also need to digitize the pension database, so that by 2022
Romania should have 5 million digitizes pension records.

The current legislation has allowed for a
14% increase in the pension system, operated last year, Minister Turcan went on
to say. Pensions will also increase in 2022 in line with the inflation rate, whereas
by the end of the next year a new pension law will be adopted, the Romanian
official also pointed out. (VP)