The new Pension Law, to be enforced as of September 2024, will add RON 2.1 billion (EUR 420 million) to the monthly disbursements from Romania’s public pension system to the 4.7 million recipients (retired persons), Finance minister Marcel Bolos announced in a press conference on August 12.

The Government began sending notifications to the recipients of public pensions, including the new value of their pensions.

The new Pension Law institutes a system of points, most of them based on past contributions to the social security system but also including bonus points for longer than required employment periods, used for the final calculation of the individual pension.

In the first quarter of the year (latest data available), the aggregated volume of public pensions in Romania reached RON 10.5 billion per month. This implies an overall 20% increase in the aggregated (or average) pensions as an effect of the new Pension Law.

The annual cost of the new Pension Law would thus be around RON 25 billion (EUR 5 billion), or 1.3% of next year’s projected GDP. For this year, the bill would be proportionally smaller: RON 6.3 billion. 

To accommodate the supplementary spending, the Romanian Government envisages cutting other spending by some RON 5 billion. While not explaining what budgets would be impacted, Minister Bolos said that the “unnecessary spending,” such as “yearend festivals and events” organized by municipalities, would be cut.

(Photo: Chernetskaya/ Dreamstime)

iulian@romania-insider.com