Ruling coalition agrees first amendments on the special pension law

Draft does not meet though the EC's requirements for the NRRP funds.

The leaders of the governing coalition decided, on Sunday evening, in a meeting at Vila Lac, to amend the draft bill on the reform of special pensions, which is in Parliament.

Thus, several amendments will be submitted to the Senate, including one regarding the prohibition to accumulate several special pensions, political sources revealed to mass media.

However, the working draft do not meet the requirements of the European Commission, which conditions the allotment of the funds from the National Recovery and Resilience Plan to Romania (NRRP).

NRRP is an intervention that aims at repairing the economic and social damage caused by the pandemic crisis, contributing to addressing the structural weaknesses of the Italian economy, and leading the country along a path of ecological and environmental transition.

The NRRP for Romania consists of 107 investment measures and 64 reforms. They will be supported by an estimated €14.24 billion in grants and €14.94 billion in loans. 41% of the plan will support the green transition and 20.5 % of the plan will support the digital transition.

Among the EC’s requirements is also that Romania undergoes a real reform of special pensions based on the higher contribution of those who benefit from these incomes.

Therefore, the ruling coalition parties, PSD, PNL and UDMR agreed to submit the following amendments in the specialized committees, in the Senate:

  • 15% taxation for the non-contributory part of special pensions (the European Commission requires 30%);
  • the accumulation of special pensions is eliminated;
  • five increments will be eliminated for military pensions;
  • CSM magistrates can no longer retire after a single mandate;
  • pensions will be indexed annually with inflation and not with salary.

The proposals will be submitted to the Senate and are to be debated in the specialized commissions in emergency procedure. The Senate must pass the bill on the reform of special pensions by Wednesday, March 29, otherwise it will pass silently through the first chamber referred to it.

The variants discussed in the Coalition do not meet though the requirements assumed by Romania in the NRRP, which provide for a real reform of special pensions based on the higher contribution of those who benefit from these revenues.

In a previous letter sent to the Government in Bucharest, the European Commission warns that two options analyzed by the Bank seem significant: the income replacement rate of 45% and the basis of calculation related to the incomes of the whole career.

The European Commission also asks Romania to eliminate the possibility of early retirement at the age of 45.

According to the Romanian Minister of Labor, the highest special pension in Romania is 40,000-50,000 lei per month and that there are “approximately 200,000” people who receive special pensions. “There are 190,000 in defense and public order and 10,000 in the two magistracy laws, the seafarers, the MAE, the Court of Accounts and parliamentary civil servants,” says the minister.

In his turn, Marcel Boloș, the Minister of European Investments and Projects, has recently said that Romania has undertaken “tough reforms” in the National Recovery and Resilience Plan, including the reform of special pensions, arguing that in order to meet the NRRP milestone, the amount of special pensions should be halved, otherwise, for each missed reform, Romania loses 700 million euros.

“Either we carry this cross to the end, or, by abandoning it, we don’t have a share of the money that is in the PNRR. If in the general pension system we have a 43.5% income replacement rate and in special pensions we have up to 85%, then if we maintain this discrepancy, we must argue very well why we do not bring them to the same common denominator. In very simple terms, it would mean that we are halving the amount of special pensions accompanied by this decision with the risk of depopulation of these large public services of national importance”, says the minister.

billdraftECEuropean CommissionfundsNRRPpnlpsdreformruling coalitionspecial pensionsThe National Recovery and Resilience PlanUDMR
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