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March 31, 2023

President Iohannis promulgates Public Pension Law

President Klaus Iohannis on Monday signed a decree promulgating the Law on the Public Pension System adopted by the Chamber of Deputies on June 26, in a re-examined form adjusted for a ruling of the Constitutional Court (CCR).

Former Labour Minister Olguta Vasilescu, the initiator of the bill, said that there were very few modifications to be made, because the law was not ruled unconstitutional in whole, but the court asked for clarification of three paragraphs.

Opposition MP Valeria Schelean of the National Liberal Party (PNL) says that “even after the Constitutional Court’s ruling, the incumbent majority did not want to adopt a law that would genuinely guarantee the right to draw a pension.” “The adopted formula is absolutely unclear. … The provisions of the CCR have not been transposed into this bill,” Schelean says.

MP Cristian Seidler of the opposition Save Romania Union (USR) criticises the fact that special pensions have not been abolished.

MP Csep Eva Andrea of the opposition Hungarian Democratic Union of Romania (UDMR) says the law has been long overdue, and UDMR supports it. “I would like to draw attention to the fact that savings should not be made at the expense of the needy, the disabled,” says the UDMR lawmaker.

MP Emil Pascan of the opposition People’s Movement Party (PMP) says that so far the majority has managed to create a new category of special pension favourites, adding that the increase in the pension computation coefficient should have been made this January.

Under the newly adopted provisions, the definition of the minimum contribution period has changed, with the reference to the invalidity pension being repealed. In this respect, the minimum contribution period is the minimum period of time required by this law in which insured persons have completed a contribution period in order to qualify for an old-age pension, exclusive of related periods.

The definition of a pensioner has been amended to “the person qualifying to draw one of the pension types provided for by the law,” while the 15-year minimum contribution period qualifying for an invalidity pension has been repealed.

At the same time, the article on contributors to the public pension system was reworded. Under the latest amendments, “the contributors to the public pension system are: a) individuals deriving income from salaries or related income, as well as from social health insurance allowances, for which employers or similar entities are under an obligation, under the Tax Code, to calculate, withhold and pay social security contributions into the public social security budget; (b) natural persons earning an income from independent activities or intellectual property rights and who, under the Tax Code, on the basis of individual statements has to pay social security contributions; (c) employers or similar entities which, under the Tax Code are under an obligation to pay the social security contribution due for special and/or hard working conditions, as well as possible differences in social security contributions that the law charges them with paying out (d) The National Employment Agency, through local offices and the sending units, which, under specific legislation are under an obligation to pay out of their own budgets the social security contribution due for persons qualifying for unemployment, as well as for Romanian staff dispatched on a temporary or permanent mission abroad.”

It has also been established that “the invalidity pension is due to persons who have paid contributions to the public pension system but fail to meet the old-age pension conditions and whose work capacity is reduced due to: a) workplace accidents and occupational diseases established under the law; b) other non-work related diseases and accidents; c) participation in the battle for the victory of the December 1989 Revolution or in connection with the revolutionary events of December 1989, who were included in a social security system prior to the date of the occurrence of the disability.”

The pension bill was initially adopted by Parliament on December 19, 2018, and on December 21, 2018, a constitutionality objection was raised over it. Following a court examination, the Constitutional Court sustained the objection and, under Ruling 138 of March 13, 2019, it found that the provisions of Article 25 (1) and Article 63 a) and b) are unconstitutional.

One week before the bill passed through the Chamber of Deputies, the decision-making chamber in this case, the Senate had rejected it in a plenary session.

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