Romanian president Klaus Iohannis signed on Monday, July 8, the decree promulgating the law on the public pension system, according to a press release from the Presidential Administration.

The project will have a state budget impact of RON 8.4 billion (some EUR 1.7 billion) this year, RON 24.8 billion (EUR 5.25 billion) in 2020, and RON 58.1 billion (EUR 12.3 billion) in 2021, Digi24 reported.

The law provides for a phased increase in the benchmark used for calculating individual pensions (pension point) starting September 1, 2019 until September 1, 2021. Thus, as of September 1 this year, the pension point will increase to RON 1,265 (EUR 268). It will then rise to RON 1,775 (EUR 376) as of September 1, 2020 and to RON 1,875 (EUR 397) as of September 1, 2021.

According to the project, the women who have reached the minimum contribution period of 15 years and have 3 children, whom they raised until the age of 16, benefit from the reduction of the retirement age by six years. Starting with the fourth child, one extra year is added for each child. Reducing the retirement age also applies if the number of children includes children adopted and raised for at least 13 years.

The standard retirement age is 65 years for men and 63 years for women. The minimum contribution period is 15 years for both men and women, and the full contribution period, which includes assimilated periods, is 35 years.

The Chamber of Deputies adopted the law at the end of June, having the final vote on the project. Several leaders of the opposition claimed that the law is not sustainable, and that it will be rather difficult for the government to cover these increases in the coming years, according to Ziarul Financiar.

newsroom@romania-insider.com

(Photo source: Presidency.ro)