Special Pensions In Romania Capped To Pension Point, Military Pensions Cut 15% – Draft

The Romanian 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%.

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As of June 1, 2010, 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=RON4.1785), compared with the current RON732.8 - e.n.," according to the draft.

The draft also sets 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, and most of the money is allotted from the state budget.

The document also reveals that 392 public servants working within the Parliament are paid average special pensions of RON2,743, while 2,741 judges and prosecutors receive monthly RON8,691 special pensions, 1,963 court employees receive pensions of RON2,962 and 304 former Court of Accounts inspectors have average special pensions of RON5,486.

In April, the Government released data which showed the state spends EUR120 million annually on special pensions granted to 8,342 people under special laws, who account for 0.14% of the total number of pensioners.

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