Romanian Labor Min: Payment Of Pensions, Social Benefits Not Endangered

Sarbu explained that a potential budget revision would have to consider the terms and conditions stipulated in the agreement with the International Monetary Fund (IMF), adding all these elements must be in line with the provisions of the agreement. 

 

The Romanian Government undertook to revise pension laws until December 31 through measures meant to index pensions to the inflation, limit the scope for discretionary pension increases and gradually adjust the retirement age, particularly for women, according to the IMF agreement.

 

"A significant source of fiscal pressure over the medium term is the cost of future pension obligations. To address this, we will reform key parameters of the pension system, in coordination with the World Bank," according to the letter of intent signed by Romanian finance minister Gheorghe Pogea and the central bank governor Mugur Isarescu, and sent to the managing director of the International Monetary Fund, Dominique Strauss-Kahn.

 

Changes will include indexing pensions to consumer prices rather than to wages and limiting the scope for discretionary pension increases, according to the letter made public Wednesday.

 

Furthermore, groups of public employees currently excluded from pension contributions will have such contributions phased-in.

 

"We will also continue gradual adjustment of the retirement age beyond the currently agreed schedule, particularly for women, taking into account the evolution of life expectancies, to allow for greater financial stability of the system, as well as to ensure that retirement parameters are more in line with EU practices," according to the letter of intent.

 

Moreover, to protect vulnerable pensioners, the Romanian government undertook to make efforts to boost targeted poverty support programs that would improve living standards.