Romanian Central Bank Governor Upholds Pension Reform

Isarescu said the pension point, an indicator used by authorities to calculate pensions, cannot be set at 45% of the average gross wage when contributions are of just 37% and the number of retirees is higher than the number of employees contributing to the public pension system.

"We don't have a pension system based on contributions, ours is based on generations. One generation is paying for the pension of another generation, so the first priority is to secure jobs," Isarescu said.

Romania's social security budget for 2010 sets the pension point at the last year's level, namely 732.8 lei (EUR1=RON4.0929), and the average gross wage for 2010 is of RON1,836, which means the pension point stands at 39.9% of the average gross wage. Pensioners, on the other hand, want the pension point increased at 45% of the gross average wage, as required by a pension law passed in 2007.

The Government approved mid-February a draft law reforming the country's public pension system and the act will be sent to Parliament for urgent debates and approval.

Under the new pension law, special pensions, such as those of lawmakers military, law enforcement and intelligence services staff, will be recalculated and therefore reduced. Prime Minister Emil Boc said the recalculation of special pensions would generate savings of EUR500 million to EUR800 million.

The International Monetary Fund, which is lending Romania EUR13 million under a two-year stand-by agreement, has requested the pension law be adopted in June this year at the latest.

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