Romania Halts Certain Pension Raises Until 2014, Over High Additional Expenses

Romania's Government will block certain pension raises, which would have taken effect next year, until 2014, arguing that the lack of a "sustainable framework" for the pension law's application will increase the social security budget deficit.

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The new pension law, adopted by the Government and in force since January 1, 2011, says people who worked in special conditions after April 1, 2001 would receive a 25% raise to their monthly scores (computed as the ratio of the individual gross salary and the average gross salary in that specific month), while a correction index would be applied to the yearly score of people who retire this year, computed as a ratio of 43.3% of last year's gross average salary and a pension point in effect at the time.

Both these raises were to take effect on January 1, 2012.

The Government's fiscal-budgetary strategy for 2012-2014 says, however, that they will be postponed until 2014, since they would entail additional expenses of about 865 million lei (EUR200) for the social security budget.

The strategy was approved by the Government on Wednesday.

(EUR1=RON4.2855)

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