The new pension law, endorsed

The pension law was voted on in the Chamber of Deputies, a decision-making body in this case.

Daniela Budu, 20.12.2018, 13:14

Romanian MPs on Wednesday passed the new pension law with 193 votes in favor, one against and 14 abstentions. Benefiting from social security pensions are the people who contributed for at least 15 years to the system. People who contributed for at least 10 years can benefit from pension only if they complete the payment of contributions to the National Pensions House for another 5 years. As a novelty in the law, the persons with serious disabilities were included, alongside the visually-impaired, in the category of people who can benefit from pension if they contributed to the system for at least one third of the total period of contribution.

The new law allows for the invalidity pension to be cumulated with other revenues. Another novelty in the new law is the possibility for women with at least 3 children, who have completed the minimum contribution period, to retire 6 years earlier. The law maintains the provision according to which the surviving spouse may opt for receiving 50% of the pension of the deceased spouse, and introduces a new provision according to which the surviving spouse can keep his or her pension and also receive 25% of the pension of the deceased.

The law also stipulates that the MA and doctoral studies are considered non-contributory periods assimilated to the contribution period, on condition that the respective person obtains a graduation diploma. The initiator of the law, the former labor minister, Olguta Vasilescu, says that the pension point, following a multi-stage increase, will reach 1,775 lei that is 385 Euros by 2020 and has given assurances that no pension will be diminished following recalculation. Also, the pension point is expected to rise at almost 407 Euros by 2021 and as of 2022 a reference point will be introduced which will depend on the inflation rate and the gross average salary.

Olguta Vasilescu: “We have eliminated the social security contributions from all pensions and we have also eliminated taxation of pensions below 2 thousand lei. For the pensions above 2 thousand lei, we lowered the tax from 16% to 10%. Therefore, we started fixing inequities even before this law was passed.”

The incumbent labor minister Marius Budai says that the new law will do away with inequities among people who had the same profession and contributed the same amount of money but retired in different years. In exchange, the leader of the opposition Liberals, Raluca Turcan, claims that the law was intentionally made to include unconstitutional provisions, so as to prevent it from coming into effect.

Raluca Turcan: “By requiring persons with disabilities to have a minimum contribution period to the system, you have introduced huge disparities despite the decision of the Constitutional Court. To put it plainly, if one of you becomes a person with disabilities, you need to have contributed at least 15 years to the system to get a pension.”

The opposition announced they would challenge the new pension law in the Constitutional Court. At present, in Romania there are more than 5 million pensioners which means almost a quarter of Romania’s total population.