Pension Law In Romania To Adjust Retirement Age, As Stipulated By IMF Agreement

“As it has been previously announced, the retirement period will gradually become the same for men and women after 2014, as stipulated by the agreement between the IMF, the European Commission and the World Bank. This measure is part of the European regulations,” said Mihai Seitan, the prime minister’s adviser on social issues.

The Government previously said the process will be completed by 2030.

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.

Labor minister Marian Sarbu stated several times this year that the current average retirement age is 63.5 years-old for men and 57.5 years old for women and that the government’s proposal is to set the retirement age at 65 for both men and women until 2030.

The World Bank estimates the deficit in the pension system in Romania will exceed 5% of the gross domestic product (GDP) by 2020, it will follow an ascending path in the following three decades and then it will reduce to 6.2% of the GDP until 2050.

The deficit will be brought about by the ageing process, as well as by the current “generous” pensions that followed the recent pension hikes, as well as by the costs entailed by the transition of a part of the Pillar I contributions (pensions funded by the social insurance state-budget) to Pillar II (funded  by mandatory private pensions).