The persons who will retire after April 1 this year will have their pension calculated according to a new formula so that the size of pension will depend on the size of paid social and health insurance contributions and the period during which these contributions were paid. The incomes that will be used to calculate the pension based on the new formula will be valorized, which is the depreciation of money in the period during which the insured incomes were obtained, before the pension is set, will be taken account of. The mechanism was approved by a Government decision, IPN reports.
The pensions determined earlier will also be valorized. At the first stage, there will be recalculated the pensions set during 2001-2008 for 80,000 recipients.
As a result of the valorization of pensions set during 2001 – March 2017, the pensions will rise by 5-25%, Laura Grecu, chairwoman of the National House of Social Insurance, stated for IPN earlier.
The average pension replacement rate (% pension against average salary) now stands at 26%, but this is expected to rise following the use of the new pension calculation formula. For an insurance period of 30 years, the replacement rate will be of 40%.
Also, as of April 1, 2017 the pensions will be increased by 6.8%. The average old-age pension will rise by 104.87 lei, the disability pension by 75.28 lei, while the average pension of participants in the Chernobyl cleanup by 193.03 lei. About 700,000 recipients will have their pensions that are paid from the social insurance budget indexed.
