Expert committees of the Romanian Senate endorsed the ruling coalition's amendments to the draft bill on the so-called "special pensions" on March 28, among protests of the reformist party USR that accuses only cosmetic adjustments to the system of privileges for various categories of state employees.

This was three days before the tacit endorsement of the bill that may still be subject to senators' vote by March 31, before being sent to the Chamber of Deputies – the decision-making chamber, according to Cursdeguvernare.ro.

Under the amendments to the initial draft, criticised by the opposition and the European Commission, the so-called "special pensions" – namely those not entirely based on past contributions, will be subject to special income taxation. 

It is not clear whether the current form of the special pensions law, a target under the National Recovery and Resilience program (PNRR) essential for the third disbursement, complies with the commitments included by Romania in the PNRR scheme (namely significantly reducing the cost of the special pensions and introducing some logic and ethics behind the system). Both targets remain problematic, particularly the one related to the system's fairness.

But the major failure of the special pension system was not even included in the PNRR scheme as a target: the public services provided by the recipients of the special pensions are at a very low level, starting with justice (where the perceived corruption index calculated by some NGOs seems to be a significant overestimation of the public perception), legislation (subject to constant amendments and contradictions) to essential services such as education, healthcare or infrastructure. In other words, the benefits not matched by performance turn into privileges, generating frustration among taxpayers and, among others, massive emigration.

Under the amendments endorsed by Senate's committees on March 28, the pension revenues over the average gross wage will be subject to a 15% tax rate unless the revenues over the average gross wage are backed by past contributions made during the working period.

Furthermore, the calculation of pensions will no longer include some bonuses (but only the wage), and the pension will under no circumstance be permitted to exceed the salary earned by the same recipient.

iulian@romania-insider.com

(Photo source: Inquam Photos/Octav Ganea)