Labour minister: Romania’s pension budget needs another RON 15 bln over doubling of pensions until 2022

The minister of labor, Lia Olguta Vasilescu, says that the pension budget will need RON 15 billion in fresh funding until 2022 as the pension amounts will double as they will be recomputed based on the new pension law, said the minister of labor, Lia Olguta Vasilescu.

Vasilescu says that the same amount of funding was needed in 2016 for the public pension system.

“The explanation is simple: in parallel there is a estimation for an increase of revenue to the social security budget, generated by the increase of wages, number of employees and of the collection rate as a reverse of the fiscal requirements,” said the minister.

The minister said the estimated revenue to the budget in 2022 stands at RON 99.7 billion, compared to RON 58.9 billion in 2018 and RON 51.6 billion in 2016.

She added that in 2017 and 2018, after many years, the number of employees exceeded the one of pensioners. According to Vasilescu, there are 6.3 million labor contracts registered in Revisal and 5 million pensioners.

According to the draft bill, the minimum pension is calculated based on the gross minimum wage in that year. People with a length of work of 15 years receive 45 percent of the country’s gross minimum wage, plus 1 percent of the country’s gross minimum wage for each additional year. Persons with work length between 10 and 15 years who are retired on the day when the law enters into force receive 40 percent of the country’s gross minimum wage, and for each additional year of age add 1 percent of the country’s gross minimum wage.