Romania Ups Pvt Pension Contribution To 2.5% In 2010 Instead Of Law-Required 3%

Romanians’ contributions to mandatory private pensions will increase by half a percentage point in 2010, to 2.5% of the contributors’ gross wage, instead of the 3% as required by the law regulating private pensions, according to next year’s draft social security budget.

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Under the law regulating the mandatory private pension system, 2% of the total social security contribution of 9.5% of the gross wage paid by each employee is to be transferred into private management during the first year of the private pension system, namely in 2008. Over the next eight years, contributions are to reach 6%, by increasing half a percentage point each year.

This year, the contribution to the mandatory private pension system was supposed o increase to 2.5%, but the government kept it at 2% in the 2009 state budget law.

Romania's private pension system regulator (CSSPP) head Mircea Oancea said last week contributions to mandatory private pensions could increase by one percentage point in 2011 or 2012 to cover the lag caused by a freeze in contributions in 2009. Oancea added he hopes the 6% level is reached before the initially set term, in 2016.

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