Labor Minister: Time bomb ticking in Romanian pension system - deficit at 16.7 bln lei

Minister of Labor and Social Protection Raluca Turcan says that there is a "time bomb" ticking in the Romanian pension system, which is currently running a deficit of 16.7 billion lei, and that there is the risk that the purchasing power of the average pension will very much erode in the future. "There is a serious amount of disinformation circulating in the public space (...). What is for certain is that under the National Recovery and Resilience Plan we have undertaken to reform this system, because it is fraught with inequalities that result in different retirement conditions depending on the year of retirement. There are huge gaps between the minimum social pension and the highest pension drawn in the public system. Millions of lei are paid every year for pension recalculation lawsuits which the pensioners win against the state. More than that, there is a time bomb ticking in the Romanian pension system, which if we don't defuse, at some point risks sending the purchasing power of the current average pension of 1,500 lei plummeting to the equivalent of 500 lei," Minister Raluca Turcan told a press conference in Sibiu on Friday. "The current deficit of the pension budget is 16.7 billion lei, which means that substantial amounts are transferred annually from the state budget to the pension budget and if we don't take action, this amount will keep growing. I provided you with these figures to make it clear why we are talking about reform. (...) This reform plan has a technical component through which five million pension files are digitized, millions of data are being transferred from an outdated electronic format into modern digital files. We are also talking about new retirement legislation to do away with these issues," said Raluca Turcan. According to the Labor Minister, the minimum contribution period for retirement remains 15 years, there will also be the option of early retirement, but this possibility must be accepted as provided for in today's legislation. AGERPRES (RO - author: Isabela Paulescu, editor: Karina Olteanu; EN - author: Simona Klodnischi, editor: Simona Iacob)