European Trade Union Institute, ETUI.

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Pension reforms in Romania: background summary

The public social security system is predominant and covers every working person (employed or self-employed) in terms of sickness, maternity, disability, old age and death. The public pension scheme is a general and mandatory system, based on the pay-as-you-go principle.

  • The pension amount is linked to the beneficiary’s income and period of contribution (insurance).
  • Persons born after 1 July 1971,who are covered by the public pension scheme, must join a supplementary private pension scheme (2nd pillar) operating under the partly-funded principle.
  • The method of calculating old age pensions involves taking account of all the insured’s occupational earnings: his or her gross monthly earnings are divided by the gross average salary. The results are then added together to determine the annual average, referred to as ‘annual points’. These are added together and the result is divided by the insurance period of thirty-five years for men and thirty years (and five months for 2016) for women. The final result is multiplied by a value laid down by law, which is currently 871.70 lei (equivalent to around EUR 200).
  • To be eligible for a retirement pension, the law imposes two cumulative conditions: the retirement age (65 years for men and 60 years for women) and a minimum insurance period of 15 years. The retirement age is set to increase to 63 years for women in 2030. Once these two conditions are met, the insured’s employment contract automatically ends.
  • To receive a full pension, the employee must have been insured for 35 years (men) or 30 years (women). For women, this period is set to increase to 35 years from 2030.
  • An early retirement pension can be granted five years before reaching the statutory retirement age if the insured has exceeded the period of contribution by more than eight years. If this condition is not met, a partial early retirement pension can be paid on request, with the amount being reduced by a maximum of 0.50 % per month of early retirement.
  • An Act adopted in July 2016 has improved the situation of partial early retirement pension beneficiaries, by providing for the reduction of the retirement pension amount by a variable rate (between 0.15 % and 0.50 %) per month of early retirement (compared to 0.75 % previously) up to the statutory retirement age.