The Cabinet agreed changes to the legislation for reforming the pension system. The reform bill envisions a unique approach for all the people, except for police employees, namely the same retirement age, the same required length of service and the same formula for calculating the pension. A new formula was suggested for calculating the old-age pension so as to ensure interdependence between the social insurance contributions and the size of pension, IPN reports.
The valorization of the insured monthly income earned after January 1, 1999 will be taken into account. The pensions will be calculated according to the new formula starting with April 1, 2017. The pensions set earlier will be recalculated.
“It is not equitable when the pension of some categories of people represents 75% of the average salary at a time when the replacement rate for most of the pensioners is three times lower, of only 26% of the average salary. The pension reform is necessary so that everyone could receive a decent and equitable pension, calculated correctly depending on the made contributions,” said Prime Minister Pavel Filip, referring to the necessity of the promoted reform.
He noted that only several categories that are now privileged will suffer as a result of the reform. “There is a category of judges, prosecutors, public functionaries, MPs, Cabinet members and local elected officials who benefit from a special attitude when their pension is calculated. We consider it is an inequity as a judge, for example, has a salary of 20,000 and retires at the age of 50, according to the current law, and the replacement rate is of 80%. A doctor, a surgeon has a salary of 5,000-6,000 lei and retires at the age of 62 and the replacement rate is only 26%. There is evidently an inequity and we must unify the system,” stated the Premier.
He provided details about the mechanism for implementing the new regulations. Those who will enter the system on April 1, 2017, will have a pension by 50% or even 100% higher compared with the pension that they would have had if this had been calculated according to the current formula. For example, if the person has an average salary of 5,050 lei, this will have a pension of about 2,250 lei or by 90% higher than it would have been now, 1,200 lei.
The retirement age will be increased gradually by six month a year for women and by four months a year for men and in 2026 will be 62 years for women and 65 for men.
The bill institutes an early pension. Those who contributed to the social insurance system and confirm the required length of service can ask for an early old-age pension at least three years before reaching the standard retirement age.
According to statistics, about 570,000 pensioners now get a pension lower than 1,300 lei, while some categories of people have pensions of up to 8,000 lei.
The document is to be transmitted to Parliament for adoption.
