In a statement to HotNews.ro, Finance Minister Marcel Bolosh says that he does not believe that the budget will be able to support the increase in contributions to the II level of pensions from January 1, 2024. “Let’s look at the financial budget strategy completed for the first time. A decision must be made in the Coalition on the topic of the budget deficit,” Bolosh said.

• “The measure to increase (contribution) to Tier II is in place, but I don’t think the impact of this measure can be borne by the state budget and it is very clear in the PNRR that this percentage of 4.75% is given depending on the fiscal budget strategy. Let’s see the strategy complete the first time. A decision on the budget deficit should be made in the Coalition.” HotNews.ro said this on Thursday, Minister of Finance Marcel Bolosh.

The minister’s clarifications came after HotNews.ro asked him for his reaction to the new draft emergency decree, which postpones for 2 years the increase of the pension contribution to the second level from 3.75% to 4.75% of the 25% quota CAS, only from January 1, 2026.

How the Cholak government boasted of respecting the PNRR by increasing the contribution to the second tier from January 1, 2024

We remind you that on March 16, 2022, the Çolaku government approved an emergency decree that provided for an increase of one percentage point, starting from January 1, 2024, in contributions to private pension funds (level II).

The Ministry of Labor, then headed by Marius Budai (PSD), boasted of achieving a major milestone in the PNRR by increasing this contribution.

• “The reform of the pension system, proposed in the National Recovery and Stability Plan, is aimed at developing legislation aimed at ensuring the medium- and long-term stability and predictability of the state pension system, respectively, the stability of the second level of pensions.
• Through the normative act adopted today, compliance with the calendar established by the PNRR (component C8, R6, stage 213) is ensured, while contributions to the II level of pensions comply with the provisions of the Fiscal Budgetary Strategy.”, This is stated in the press release of the Ministry of Labor from this date.

Contributions to private pension funds are part of the social insurance contributions belonging to the state pension system and are deducted from the gross monthly income, which is the basis for calculating social insurance contributions.

Currently, 3.75% of the 25% share of CAS is transferred to the accounts of more than 8.1 million Romanians, to the II level of pension insurance.

Administrators of pension funds ask the Government to respect the legislation and PNRR

The Association of Private Pensions of Romania (APAPR) reacted on Thursday, saying that it learned today from the media about the government’s intention to once again postpone the increase in the contribution to the second level of private pensions from 3.75% to 4.75% until 2026. its application from January 1, 2024 in accordance with the current legislation and PNRR.

• “The postponement proposal grossly contradicts the provisions of the PNRR, stage 213 of the Level II financial consolidation, which is considered to be resolved as early as March 2022 and for which the Romanian government has already received money from the European Union related to the corresponding tranche of the PNRR.
• According to the original law, the contribution was supposed to reach 6% of Romanians’ gross income as early as 2016, but this level was never reached because the law was not enforced for more than a decade.
• By repeatedly postponing the Tier II contribution increase, it hurts all active workers in Romania who are working, paying fees, taxes and contributions and who have legitimate expectations of a decent pension, including Tier II.
• In accordance with the constitutional spirit of the welfare state and the balance of the fiscal burden, the government is obliged to allocate public funds not only to pay today’s pensions to Romania’s pensioners, but also to allow the active generation to secure a better financial future, including through the II level of private pension provision.
• Launched 16 years ago in Romania, Pillar II currently manages nearly €25 billion on behalf of more than 8 million Romanians, with investment returns almost double inflation. All EU and OECD member states have private pension systems, the trend in civilized countries is to support and encourage additional savings for retirement, including through fiscal measures.
• APAPR publicly calls on the Romanian government to comply with the current legislation and previous commitments to the European Union and increase the Tier II contribution to 4.75% from January 1, 2024, in accordance with the law and the PNRR.” informed the Association.

Pension Tier II covered more than 8.1 million members over 15 years in September 2023, of which only 4.1 million members are active. On the same date, the value of the assets reached 117.1 billion lei, and the net income from investments (net of commissions) for the participants of level II amounted to 30.3 billion lei.