14.11.2023

ROMANIAN PENSIONS WILL INCREASE BY AN AVERAGE OF 40% FROM NEXT YEAR

Romanian state pensions will rise by an average of 40% from September 2024 after recalculations based on an upcoming bill, increasing pension costs to 13.8 billion lei (about $2.97 billion) a month, Labor Minister Bucura said Fresh, reports Reuters.

The pension reform is a condition for Romania to continue using EU recovery funds, with the country committed to eliminating inequalities and removing pre-election political decisions from the process of pension increases.

Under the upcoming pensions bill, which the government will seek parliamentary approval this month, five million pensions will be indexed by 13.8% as early as January as a first step.

The recalculation, planned for September 2024, will eliminate inequality by ensuring that people who have worked the same job for the same number of years will receive the same pension.

The bill, which was supposed to be approved in the first half of this year, has been repeatedly delayed and will take effect from 2024, when Romania holds local, parliamentary, presidential and European elections.

Overall, government spending on pensions will rise to an estimated 146 billion lei ($31.45 billion) in 2024 from an estimated 115 billion lei this year.

Just under 2 million Romanians, or 10% of the population born during the communist-era abortion ban, will reach retirement age after 2030, representing a destabilizing increase in costs to the state pension system.