Romania will have to allot some RON 15 billion (EUR 3.2 billion) from the state budget to the pension budget in 2022, when the new pension law will produce its effects, according to labor minister Lia Olguta Vasilescu.

The new pension law provides that state pensions will be double in 2022 compared to 2016. However, the labor minister says that the revenues from social security contributions will also increase by then, due to higher wages and a higher number of employees, local Agerpres reported. The labor minister estimates that the pension contributions will reach almost RON 100 billion in 2022, up from RON 58.9 billion in 2018 and RON 51.6 billion in 2016.

Lia Olguta Vasilescu also said that the new pension law won’t change the functioning of the mandatory private pension funds (Pillar II). However, part of the fees that Pillar II pension fund managers get from the new monthly contributions, will go to the state pension house, which does all the work, according to the minister.

The new pension law draft was presented by Social Democratic Party (PSD) leader Liviu Dragnea on Thursday evening. It provides that all state pensions will be recalculated in 2021. The law needs will be adopted by the Parliament this fall.

editor@romania-insider.com