Romanian PM Says Special Pensions Will Be Cut Like Any Other Pension

The Government is revising the calculation method of special pensions to cap them, as of June 1, to a level calculated strictly in ratio with the pension point, an indicator used by authorities to calculate pensions, whereas military pensions will be cut by 15%. As of the same date, the financial aid and benefits granted at retirement or military discharge will all be eliminated.

These measures are included in a draft emergency decree aimed at reducing public spending.

„Starting June 2010, special pensions will be calculated based on a pension point of 622.9 lei (EUR1=RON4.1950), compared with the current RON732.8 – e.n.,” according to the draft. It also states that, as of June 2010, the public pension system will no longer apply the provisions regulating early retirement procedures.

Another draft decree stipulates that special pensions in Romania will be drastically cut as of June 1, based on a lower pension point and the application of a 90% quota, as „solidarity tax,” to the sum left after deducting social contributions and the income tax, according to a draft emergency decree regarding public spending cuts.

A document drafted by the Finance Ministry reveals that the Government pays monthly average special pensions which range between RON1,176 and RON9,182 to over 8,340 lawmakers, diplomats, magistrates, former aeronautic industry employees and Court of Accounts inspectors. Overall, the state is said to spend EUR120 million each year on the pensions of 0.14% of the total number of retirees.

Boc will meet Friday with Romanian employers’ organizations for talks on the letter of intent agreed upon with the IMF, before it is approved by the Government. The prime minister met Thursday with union federation leaders, but the two sides failed to agree on a solution to reduce the budget deficit.