The future pension law, challenged by unions and pensioners

The draft pension law which was adopted on Tuesday by the Senate plenary and which was submitted to the Chamber of Deputies - the decision-making body regarding this normative act - is disputed by the National Trade Union Bloc (BNS) and the National Federation of Romanian Pensioners (FNPR), its members the latter threatening protests across the country.

In a press release issued by the National Federation of Pensioners in Romania, its management shows that it requested that the representatives of pensioners be part of the working group that developed the draft normative act on the reform of public pensions.

The cited document states: "The Ministry of Labor did not agree and rejected our request. It was promised that we will receive the draft law when it is submitted to public debate. But even this was not fulfilled. The National Federation of Pensioners from Romania, the largest federation of pensioners' organizations, received the draft of the new law on November 10, 2023, after it was submitted to the Parliament. Being ignored, the leadership of the federation decided to make its protest public because for the organizations of pensioners the new pension law, which will of course be approved, presents for pensioners, as well as for future pensioners, a very special importance. The Federation, in good faith, in the short time available, drafted a large number of proposals, starting with the definition of the terms - what does pensioner mean, what does pension mean - and ending with the proposal to abolish Pillar II of pensions, or to be supported from other incomes of those who want an additional pension and not from the social insurance contribution. While the proposals were being drafted at the federation, the law had already reached Parliament".

Dumitru Costin, the president of the SNB, highlighted yesterday, during a press conference, the impact that the future pension law will have on the national economy: "It is a law that sanctions active employees. We will inform the European Commission in Romania about the uncertainties that this law brings. I have already notified the European Labor Commissioner! The only ones who benefit, in the short term, from this project are the current pensioners on the payroll. It does not seem to be the solution that the workers in Romania were waiting for! Get ready that in 2030 the retirement age will be raised again as things look, with the adoption of the project!".

According to an analysis prepared by the National Bank of Romania, the draft law before the Chamber of Deputies is the third pension reform with the declared objective of correcting the inequities of the system, but each time political decision-makers have postponed the law's implementation deadlines and application conditions. For example, the leaders of the SNB show that, in the last reform of public pensions, from law 127/2019 the only provisions applied are the value of the pension point from January 1, 2024 and the chapter on social insurance jurisdiction, the rest of the provisions being postponed every year by ordinances emergency by the successive Cabinets at the Victoria Palace.

In the cited analysis it is stated: "We expected there to be a real public debate, which would be conducted with impact assessments, not only from the perspective of the deficit generated to the public budget, and not only with figures related to potential pension increases, without funding sources be clarified. (...) The number of people over 65 will increase by 2040 from 3.8 million to over 4.4 million, while the employed population will decrease in the same period from 7.6 million to 6.4 million . The trend will become more and more pronounced, which will generate difficulties in maintaining the sustainability of the public pension system. The public pension system is not just for today. He must provide solutions both for those who are about to retire and for those who have already retired. No one has assessed what impact this law has on people who are contributing to the system today and may be reaching retirement age tomorrow or 10 years from now. This approach is all the more frustrating as starting from 2018, (...) employees are the main contributors to the public pension system. In no other EU member state do the insured participate with more than 40% of the total contributions for financing the system; in Romania the participation is 67%".

The pension law will be debated on Monday, November 20, by the Labor Committee according to the schedule established yesterday by the Permanent Bureau of the Chamber of Deputies, and on the same day, at 4 p.m., it would be debated and voted on by the full Chamber, as a decision-making body . The deadline for submitting amendments to the draft law is November 17, and the deadline for submitting the report is November 20.

We remind you that the draft law was passed by the Senate plenary on Tuesday, after the specialized commissions issued a favorable report with allowances allowed. The leaders of USR and AUR senators, Radu Mihail and Claudiu Târziu, requested the resending of the legislative initiative to the committees: USR requested for three weeks, and AUR for at least two weeks, but both requests were rejected by the senators. After the vote on the project, USR representatives said that the party's senators voted against the proposed law. At the same time, the leader of the AUR senators Cladiu Târziu announced that the senators of the formation abstained from the vote, because "a slight increase is better than nothing".

The draft law on the public pension system was adopted by the Senate with 85 votes "for", six "against" and 19 abstentions.

The legislative initiative provides for the increase, from January 1, 2024, of the pension point by 13.8%, from 1,785 lei to 2,032 lei and an increase, following the recalculation according to the new formula, from September 1, 2024. At the same time, the right to pension is obtained after a minimum of 15 years of contributions, not taking into account assimilated non-contributory periods, such as university studies, military training, medical leave, unemployment, deportation, imprisonment or political detention. The draft law provides for a gradual equalization of the retirement age for women and men at 65 by 2035.

The budgetary impact of the new pension law is 25 billion lei for next year, of which 15 billion lei are needed for the indexation of the value of the pension point, from January 1, 2024, and 10 billion for the recalculation that will be applied from September 1, 2024 Nicolae Ciucă, the president of the Senate, stated that, from the analysis he saw, the budgetary impact for the year 2025 is 33.1 billion lei.