According to a
\nrecent survey carried by a major European bank, roughly 54% of the Europeans
\nhave estimated they would remain active on the labor market after retirement
\nage. Taking part in the survey were respondents from 15 countries, 13 of which
\nEuropean. At European level, only a quarter of the population is expected to
\nhave the same standard of living after retirement. As usual, figures for Romania
\nare even more pessimistic: 63% of those
\nwho participated in the survey thought they would have no choice other than to
\nwork even after retirement, to be able to pay their bills. <\/p>\n
<\/p>\n
However, if we want
\nto make any sense at all of such percentages, Manuela Stanculescu, a
\nsociologist with the Research Institute for Quality of Life, believes we need
\nto start from the fact that the aforementioned percentages account for opinions
\nand expectations. It is the kind of opinion that ties in with the answer patterns
\nrelated to the direction in which the country is going (good or bad) or the
\nlevel of personal happiness. As for the latter criteria, Romanians have always
\ncome bottom of the table in Europe, because they are pessimistic. Furthermore,
\nsurveys of this kind point to a certain behavioral pattern or a certain kind of
\nmentality, according to Manuela Stanculescu:<\/p>\n
\n
<\/p>\n
<\/p>\n
Romanians show a certain behavioral pattern. It is only in recent years
\nthat they have started, a part of them, nyway, to make long-term plans. For
\ninstance, some of them make plans as regards their pensions. Because of the
\ncommunist past, the way we still think goes something like: the pension is
\ncoming, we’re just waiting for the pension to arrive. It’s as if we thought
\nthe pension arrives all by itself and knocks on the door. Citizens of other
\ncountries are aware that their own pension must be their concern. Furthermore, in
\nthose countries there are several financial instruments and means for people to
\nthink out and plan their pension. It is a behavioral pattern that people in the
\nWest grow accustomed to as early as their school days. In Romania, something
\nlike that is neither learned at home, nor is it taught at school. It is only recently,
\nand only with the above-average population, that the tendency has been
\nactivated, to have that kind of behavioral pattern allowing you to start
\nplanning your holiday or to start making financial plans regarding the
\nschooling of your child abroad. Something like that had not existed before.<\/p>\n
<\/p>\n
\n
<\/p>\n
To put it differently, a larger part of
\nRomanians, as well as the other east-Europeans whose existence was marked by
\ncommunism, need to understand that pension planning is also a kind of
\nresponsibility towards one’s personal destiny. That pattern of behavior is a
\ndismal communist legacy which becomes obvious when the saving level is
\nmeasured. At this point, the living standard criterion has its say. Around 69%
\nof Romanians say they are unable to save because of their small incomes.
\nHowever, apart from poverty and mentality, there is another cause for that,
\nwhich is quite specific: the offer of banking and financial institutions in
\ngeneral, says Manuela Stanculescu. Here she is once again, this time speaking
\nabout the real causes of the low level of spending. <\/p>\n
<\/p>\n
\n
<\/p>\n
A high level of poverty. Many
\npeople cannot save because they don’t have anything left to save. Secondly, saving
\nas such is not a behavioral pattern with them. Why? Because they have not been
\neducated that way. The problem of the countries that have freshly emerged from
\ncommunism is the lack of financial education in schools. Thirdly, there is no
\ndiversity of financial products capable of encouraging saving, since in Romania
\nbanks do not offer that kind of diversity of banking or financial products, as
\nit happens elsewhere across Europe.<\/p>\n
<\/p>\n
\n
<\/p>\n
Nevertheless, the population’s perception and
\nexpectations are supported by specific data, albeit partially. As early as
\n2009, the World Bank warned that, in Romania, the pension system deficit would
\nexceed 5% of the GDP by 2020. It would then follow an upward trend, followed by
\na turn down to 6.2% of the GDP by 2050. Deficiencies are caused by the
\npopulation’s aging rate but also by the costs of transitioning a part of the
\ncontributions from Pension Pillar One (pensions assured through a state-managed
\npublic system funded from the social insurance budget) towards Pillar Two
\n(pensions assured through mandatory contributions to a privately-managed
\npension fund).<\/p>\n
<\/p>\n
In 2009, when these forecasts were made, Romania had already
\nreformed its pension system structuring it on three pillars: Pillar One, where
\nthe employee contributions are administered by the state, Pillar Two -
\ncompulsory for people under 35 and optional for those between 35-45 – where a
\npercentage of the employee contributions is privately managed and Pillar Three,
\nwhich is a pension system based upon optional participation and managed by
\nprivate companies. While a little over 7 million Romanians are contributing to
\nPillar Two, only about 410 thousand people opted for Pillar Three at the end of
\n2016. This proves either that only 400 thousand Romanians had figured out that
\npension planning was also a matter of personal choice or that only these people
\ncould afford monthly deposits in a private pension account. <\/p>\n
<\/p>\n
Therefore, people’s
\npessimism over the need to continue working post retirement is explained by the
\npresent standard of living and also by data which prove the decline of the
\npopulation. Here is Manuela Stanculescu again with details.<\/p>\n
\n
<\/p>\n
<\/p>\n
The
\nbig problems related to retirement in the future stem from three sources. The
\nfirst is population ageing, and we are presently witnessing an accelerated ageing
\nprocess, which means that in the next 10-20 years we are going to see an
\nincreasing number of people of retirement age. Their pensions are supposed to
\nbe assured by the young people, whose number has been constantly decreasing and will keep doing so. So these
\nfew youngsters are supposed to provide assistance for a large number of
\npensioners and that will put pressure on the pension fund. Another strong
\nsource is the grey economy, which is still very developed in Romania. On the
\none hand, it is a means to survive, but on the other hand and in the long run, it
\ncan lead to our very destruction. The real downside to illegal employment is
\nthat we cannot track income sources and that will eventually translate into
\neither small pensions or no pension funds at all. The third significant source
\nis international migration, which works like that: let’s say that somebody
\nworks abroad illegally, they return to a menial job or to no job at all in the
\ncountry after which they leave again. They may have earned a decent living but
\nthey contribute to no pension fund either in Romania or abroad. So, these
\nphenomena of people’s aging and migration are to create really big problems to
\nthe next generations and in the future we may as well speak about poverty among
\npensioners. In this not -so- distant future, pensioners may form a category very
\nvulnerable to poverty. At present they aren’t. Children and young people have
\npresently reached a poverty threshold inacceptable in any modern society.<\/p>\n
<\/p>\n
\n
<\/p>\n
Experts
\nbelieve though, that if authorities focused more on how to improve the
\nsituation of these young people, that would automatically lead to an increased
\nsustainability of the pension system. <\/p>\n
\n
\n
\n
\n
\n
\n
\n
\n
\n
<\/p>\n","protected":false},"excerpt":{"rendered":"
According to a recent survey carried by a major European bank, roughly 54% of the Europeans have estimated they would remain active on the labor market after retirement age. Taking part in the survey were respondents from 15 countries, 13 of which European. At European level, only a quarter of the population is expected to […]<\/p>\n","protected":false},"author":136,"featured_media":82472,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[42997],"tags":[],"coauthors":[],"class_list":["post-143092","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-society-today"],"acf":[],"yoast_head":"\n