A new law on private pensions
The draft law on the payment of private pensions received a decisive vote in the Chamber of Deputies in Bucharest on Wednesday.
Roxana Vasile, 16.10.2025, 13:50
Pillar 2 of mandatory private pensions was introduced in 2008. It was anticipated that, due to declining demographics and the large number of people choosing to work abroad, Romanians on the domestic labor market who were to retire in a few decades would face a deficit of the funds from the country’s budget intended to pay their pensions. Unlike the state pension, paid from the social security contributions of active employees, the mandatory private pension in Pillar 2 represents the money accumulated monthly by each employee. Currently, according to official figures, over 8 million Romanians contribute to Pillar 2. It should also be noted that, in addition to this Pillar 2 of mandatory private pensions, there is also a Pillar 3, also private, but optional.
On Wednesday, the Chamber of Deputies, as the decision-making body, adopted a draft law on the payment of private pensions, a commitment – it was said – assumed by Romania for its accession to the OECD. In short, the beneficiaries of the private pension system will be able, upon retirement, to withdraw only 30% of the accumulated amount, with the rest of the money to be received monthly, over a period of 8 years or for the duration of their lifetime in the form of a life annuity.
The exceptions will be patients with oncological diseases and people with deposited funds lower than the equivalent of 12 monthly social allowances, who can receive, upon retirement and upon request, all the money collected. Opinions were divided, including among the Power! The rules are not changed during the game, but the payment system for the accumulated money is created, said the Social Democratic deputy Adrian Solomon.
It is not a perfect law, but it offers more guarantees for the beneficiaries of the private pension system, the Liberal deputy Florin Roman emphasized in turn: ʺPeople have the guarantee that they will receive this money, that they will receive that first installment that is not subject to taxation and that helps them have more money in their pocket for retirement.ʺ
On behalf of the Save Romania Union, deputy Claudiu Năsui proposed, without obtaining the support of the plenum, that in the case of the optional Pillar 3, beneficiaries could withdraw the entire amount. The amendments of the Democratic Union of Ethnic Hungarians in Romania were also rejected, which requested that, along with oncological patients, people enrolled in national health programs could also obtain all the money at once. The opposition Alliance for the Union of Romanians drew attention to the fact that the measures are extended to all private pension funds.
Deputy Dumitrina Mitrea: “You have mixed these three types of pensions so that you could, in the end, tax these types of pensions. You are once again putting your hand in the citizen’s pocket, instead of doing something about demographics, to no longer have 7-8 million Romanians working abroad.”
The Alliance for the Union of Romanians announced that it was going to challenge the law on the payment of private pensions at the Constitutional Court. “The system has functioned for almost two decades with clear rules, and Romanians have contributed with confidence to it to ensure a peaceful retirement,” explain the party representatives who believe that the real beneficiaries of the current law are the administrators of private pension funds and the state itself, which constantly borrows from this money. Once promulgated, the law is expected to enter into force one year after its publication in the Official Gazette. (LS)
