Government challenges special pensions law

The Government has challenged the ‘special pensions’ law at the Constitutional Court of Romania (CCR)for the second time. Senators passed the law on June 21. According to the PM, the law has a budget impact to the tune of RON 400 million annually.

According to PM Dacian Ciolos, the law fails to mention how the special pensions will be funded and does not comply with the principle of contributions. “We decided to submit again the law to the Constitutional Court, I have just signed today. (…) The law does not say clearly how these pensions and special indemnities will be funded. As the law provides now, they would continue to impact state budget because the local budgets too, for the most part, are fueled by the state budget. And, on the other hand, the principle of contributions is not respected, this law would apply retroactively, therefore we requested that the CCR clarify whether these elements, which are maintained by the law, are constitutional,” PM Ciolos said.

Ciolos also mentioned that the Government contested the law for the first time after the Parliament decided on the special pensions, adding that the legislative failed to incorporate the objections raised and accepted by the CCR. The PM assessed the impact of the law on the budget to EUR 400 million, warning that, due to the fact that the law is to be applied retroactively, the number of beneficiaries could be greater, as well as the overall budgetary impact.

According to the PM, the special pensions do not comply with the principle of contributions. “In practice, what special pensions imply is that one is giving pensions more than the category in question contributed to the pensions budget, therefore someone must provide the surplus. It was also the reason why we challenged at the CCR – one of the reasons – when the Parliament took this decision. Certain amendments were made, but they did not incorporate the elements assessed at the CCR and accepted by the CCR,” Ciolos explained.

According to the PM, if we have a lot of such categories that amass special pensions, (…) they are risking to affect the consolidation of the idea and of the pensions system in Romania.