September 2019

05Sep

The road to bankruptcy: Romania’s fiscal deficit to reach 8 pct of GDP by 2022 if the new pension law is implemented, IMF says

The new pension law could double Romania’s already sizable fiscal deficit, which could reach 8 percent of GDP by 2022, and raise external financing needs to excessive levels if it will be implemented as is without offsetting policy measures, International Monetary Fund (IMF) experts warn. For 2019, IMF estimates a fiscal deficit of 3.7 percent of GDP in Romania. The government has enacted a new law that will double the pillar I pension benefits by 2022, without yet spelling...

September 5, 2019
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March 2019

13Mar

Romania’s PM Dancila assures there’s enough money for pensions

Romania’s social security budget will post a surplus of RON 1.7 billion (EUR 360 million) this year, as the Government’s decision of re-organizing the payment of employees’ contributions to the fund has paid dividends, prime minister Viorica Dancila assured in a press conference on March 12, in which she addressed the Presidency’s criticism of the 2019 budget planning. President Klaus Iohannis said in a statement on March 11 that "the social security budget misses some RON 1.4 billion." Dancila...

March 13, 2019
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January 2019

09Jan

Romania’s Government creates legal framework for occupational pensions

Romania’s Labour Ministry drafted a law that allows employers to set up occupational pensions for their employees, newly-appointed labour minister Marius Budai announced. The occupational pensions are designed as supplementary pensions, a benefit that employers can offer, he explained, according to local Agerpres. The law is aimed at implementing the EU Directive 2016/2341 of the European Parliament endorsed by the European Council on December 14, 2016 for the supervision of the specialised occupational pension funds managers. One or more employers can set...

January 9, 2019
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October 2018

18Oct

AmCham Romania warns new pension law poses risk for budgetary and macroeconomic imbalance

The American Chamber of Commerce in Romania (AmCham), which represents 430 companies, expressed concern in a statement today regarding the significant increase of the social security expenses that the pension law draft, recently approved by the Romanian Government, levies on the general consolidated budget. “We believe that is mandatory for the presentation and consultations around this draft legislation with a major budgetary impact, to include information about the financing sources of the related increases, in accordance with the provisions of...

October 18, 2018
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17Oct

Romania to Double State Pensions by 2022

Government plans to boost pension spending to $35.2 billion in four years. In a move to eliminate discrepancies that have built up between various beneficiaries of the state pension system, Romania’s government has approved a plan to increase pension-related spending to 142 billion lei ($35.2 billion) by 2022, from approximately 62 billion lei this year. The plan is expected to more than double state pensions over the next four years for the country’s 5.2 million retirees, according to Reuters. Olguta Vasilescu, Romania’s...

October 17, 2018
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November 2017

16Nov

Romania should stay the course – funded private pensions the key to sustainable future, PensionsEurope warns

After the Romanian government has decided to cut the contributions to pillar II to 3.75% (instead of raising to 6% from the actual 5.1% as mentioned in the initial draft bill), people in Romania are now facing a significant risk of suffering a decrease in their future retirement income, PensionsEurope warns. "Funded pension are vital for future pensions as public pension come increasingly under pressure. Romania has been able to build excellent private pensions and should not start to dismantle...

November 16, 2017
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September 2017

08Sep

Major change. Romania’s second pension pillar could have optional contributions

Under current rules, the contributions are evenly split between the first pension pillar, managed by the state, and the second one, which is managed by private administrators. There is a third pension pillar which is private. “Nobody will dismantle pillar II, nobody will nationalize it, nobody will harm it. (…) It will become optional,” said Tudose in an interview for Digi24. The PM went on to say that the first pension pillar had better results based on the minimum wage, but...

September 8, 2017
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April 2017

13Apr

Romanian SocDem leader lashes at Dutch pension fund manager and financial regulator head for spreading “fake” information

Liviu Dragnea, the head of the Social Democratic Party (PSD), accused the local subsidiary of Dutch insurance group NN of spreading false rumors about the possible nationalization of the local private pension funds and inciting its clients to protests and called for a harsh reaction from the authorities against the company. He also accused the president of the Financial Supervisory Authority (ASF) Misu Negritoiu, a former ING Romania CEO, of having started the whole scandal on the nationalization of private...

April 13, 2017
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