Romania Keeps Pvt Pension Contribution At 2.5% Till Yearend, Raises It At 3% In 2011

"The association has received official confirmation that the level of the contribution ill be kept unchanged until the end of the year and will rise half a percentage point, to 3%, in 2011," Coman said, adding the confirmation came amid fiscal policy talks between the Government and officials of the International Monetary Fund, World Bank and the European Commission.

Late May, Finance Minister Sebastian Vladescu said the Government planned to lower the level of contributions to the mandatory private pension system at the state budget revision scheduled for end June - early July. Previously, Stefan Radeanu, head of an employers' association, said the finance minister had told employers the mandatory private pension contribution was to be lowered to 0.5% from the current 2.5%.

Under the law regulating private pension in Romania, contributions to the mandatory segment are set to increase by half a percentage point each year, from 2% of employees' gross wage in 2008 to 6% in 2016. Romania already lags behind in raising contributions, as the Government froze them at 2% in 2009 citing budget restraints amid the financial crisis.

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