Pensions bill adopted by Senate

The Senate adopted on Monday, with 81 votes in favour, 12 against, and 8 abstentions, the Government’s bill on the public pensions system. The Senate also adopted some amendments tabled by the PNL and UDMR, however the amendments did not concern the substance of the bill. The bill will next enter the House, the Chamber of Parliament that will have the last say on this matter. The bill entails the gradual hiking of the pension point until 2021, thusly: 2019 – RON 1,265; 2020 – RON 1,775; 2021 – RON 1,875. From 2022, the value of the reference pension point will be indexed annually with the inflation rate and 50 percent of the real hike of the gross average salary. The pension point will reach 45 percent of the gross average salary, however without taking into account the tax burden, in line with the fiscal legislation in force on the date the governance programme was adopted. The bill stipulates that that no pension currently in payment will drop in value. If, following the recalculation, the result is a sum lower than the one currently being paid, then the sum currently paid will be maintained. The bill maintains the optional insurance contract, but with amendments. Thus, while the law currently in force allows retroactively paying contributions for five consecutive years, in the future one will be able to choose different non-contribution periods that would total 5 years. The sums can be paid in instalments, but no later than one year after the signing of the contract. In case the sum is not paid in full, the partially-paid sum will be taken into account. At present, the optional insurance is calculated based on the minimum salary, but in practice it has been proven that this does not even ensure the minimum guaranteed pension, so it was decided to use the average salary as indicator. This type of contract is concluded only in the case of persons who have contributed a minimum of 15 years. The provisions concerning the insurance contract for future periods are maintained, with the new basis of calculus. The novelties brought about by this bill include the introduction of Master of Arts and Doctoral studies as non-contributive periods assimilated to the period of contribution, coming on top of the already legislated Bachelor of Arts studies, involuntary draft, invalidity pension, medical leave, parental leave, indemnified unemployment, deportation, period spent as prisoner of war or political prisoner. The condition for the non-contributive period to be assimilated to the period of contribution is for the minimum period of contribution to be 15 years. 0.25 pension points are offered for each year of the assimilated period. At the same time, the bill defines a pensioner as the person who benefits from social insurance pension and has contributed for a minimum of 15 years, as well as the blind persons who have fulfilled one third of the full contributory period. Blind persons have been nominated as pensioners within this category too, their situation having been regulated in the entire succession of legislative acts since 1967, in specific conditions determined by their physical situation, this being the reason for the fact that the contribution period required for their retirement is lower than the minimum contribution period stipulated by law for public pensions system insurants. The special and uncommon labour conditions and the former labour groups are maintained and, likewise, the legal basis is created to recognise other jobs that feature special labour conditions. Likewise, the threshold for the reduction of the retirement age has been lowered from 6 years to one year in the case of uncommon labour conditions, and from 2 years to one year in the case of special labour conditions. For instance: for one year of work in uncommon labour conditions the retirement age is lowered by 3 months, while for one year of work in special labour conditions the retirement age is lowered by 6 months. The bill stipulates the same 4 categories of pensions: retirement-age pension, early-retirement pension, invalidity pension and survivor’s pension. They are the same four categories as in the old law, but some have undergone structural changes. In the case of retirement-age pension, both the minimum period of contribution and the standard retirement age conditions must be met. As an exception, the current early retirement pension (non-penalised) becomes retirement-age pension. Namely, persons who have exceed the full contribution period – including assimilated periods – by 8 years, can retire 5 years before reaching retirement age. At the same time, in this case the pension can be cumulated with a salary and the assimilated non-contributive periods are capitalised on. Another novelty is that women who contributed for a minimum period of 15 years and gave birth to 3 children that they raised until each of them was 16 years of age will benefit from a 6-year reduction of the retirement age. One extra year is added to the reduction period for each child born and raised in excess of the three already mentioned. All other legal provisions currently in force regarding the retirement-age pension, such as the groups, the special and uncommon conditions, the handicaps etc., remain in force. Early retirement (penalised) is the current partial early retirement and the legal provisions currently in force will be maintained. When it comes to the invalidity pension, the degrees of invalidity are redefined in order to offer the possibility of carrying out some professional activities in parallel. Thus, the first degree is characterised by severe functional deficiency and diminished capacity for work; the second degree is characterised by pronounced functional deficiency and diminished capacity for work; the third degree is characterised by average functional deficiency and diminished capacity for work. The survivor’s pension is maintained, and a new benefit is introduced in addition to the current provisions, namely the aid for the surviving spouse, the latter collecting 25 percent of the deceased spouse’s pension. This benefit can be cumulated with the surviving spouse’s own pension. The minimum pension is calculated...

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