Romania Econ Min: Whoever Wants Higher Pension Should Contribute To Pvt Pension System

Videanu stressed the Romanian government has had no choice but to take austere measures, as it can no longer tolerate the „same old discrepancies” in the public pension system and at the level of salaries in the public sector.

Videanu pointed out that the public pension system must be based on the principle of contributiveness, whereby pensions are calculated in ratio to a retiree’s overall social security contributions, adding people who want high pensions ought to make pension contributions to the private pension system.

According to Videanu, the same principle is also applied at the level of salaries in the public sector where the huge salary discrepancies must be done away with.

In October 2009, the Government drafted an IMF-required pension law which was to increase retirement age and eliminate special pensions, such as those of lawmakers, magistrates, military, law enforcement and intelligence services staff.

The Government has pledged to reform the country’s public pension system under an IMF-led EUR19.95 billion financial rescue package.

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.