Romania To Face No Problems Paying Pensions In 2010 – Labor Min

Seitan highlighted the country’s pension system must be reformed, adding many European countries are faced with problems concerning sustainable pension systems.

The minister said the country’s public pension system had become unsustainable and ran the risk of posting a deficit of as much as 6% of the country’s gross domestic product by 2025, adding the state budget will have to allot EUR2 billion to pay pensions in 2011 if the current pension system is maintained.

Romania’s Senate on Wednesday approved 38 to 34 votes the government’s request to debate the draft unitary pension law with urgency.

The Senate’s committee for labor, family and social protection on Wednesday sets off debates on the draft unitary pension law, which will also be attended by Labor Minister Mihai Seitan.

Under the draft pension law, all special pensions would be integrated in the public system and would be recalculated depending on people’s contributions, which means they would be reduced.

Seitan said last week that about 10% of special pensions in Romania could be reduced by an average EUR1,500 following recalculation under the new pension law, but reduction could be by as much as 80%, adding magistrates, aviators and diplomats would be the most affected.

The labor minister said Romania currently has about 200,000 retirees receiving special pensions, of which 25,000 could drop by an average EUR1,500 following recalculation.