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Romanian govt seeks confidence vote on pensions

Romania's minority government called on Tuesday for a parliamentary vote of confidence, in a test of the opposition's support for IMF-prescribed pension reforms before a November presidential election.

The cabinet of centrist Prime Minister Emil Boc also faces a separate confidence motion filed by the opposition, following a sudden split of the centre-left coalition last week. No timing has been set for either of the votes. The pension bill, which streamlines pension regulation and raises the retirement age to 65 by 2030, is one of the conditions set by the International Monetary Fund in return for 20 billion euros ($29.45 billion) in aid. It needs to become law this year. The current retirement ages are 58 for women and 63 for men.

Pensions and wages are expected to top the agenda for the hotly-contested presidential poll. The bill faces stiff opposition from some public sector workers such as judges and police who currently get preferential pay, and from trade unions which oppose a higher retirement age.

If it fails, Romania risks losing some of the international aid, vital for maintaining investor sentiment and its ability to finance a growing budget deficit. Last week's break-up of Boc's centre-left coalition after less than a year put into question Bucharest's ability to meet fiscal targets and pursue reforms required by the IMF. Boc sought to reassure markets that reforms were on track. 'This represents a commitment of the government towards Romanians and international bodies,' Boc said after a cabinet meeting. 'Even if some measures are tough, they are healthy for the public pension system,' Romania has one of the highest proportions of pensioners in Europe, with 4.9 million employees supporting a budget that funds around 6 million retired workers.

Nearly 258,000 public pensions to be recalculated

All the 258,000 special public pensions will be recalculated six months after the coming into force of the uniform pension law, state secretary with the Labour Ministry Mihai Seitan said on Tuesday. 'The old pensions will stay in force until the new figures become available,' he said. Seitan mentioned that the new uniform pension law provides for a new way of computing ordinary public pensions by increasing the reference computation point adjusted for a 5-percent, plus a 50 percent rise in the average gross pay, estimated at 2 percent for 2010, which gives a rise of one percent. 'As public wages are frozen in 2010, the pensioners, whose income will be adjusted for inflation, will stand to gain the most,' Seitan explained.

Pogea: new law cuts down pensions' share in GDP by 0.5pc in 2010

The new law on pensions for which the Government will assume responsibility will reduce the pensions' share in the gross domestic product (GDP) by 0.5 percent in 2010 and will gradually decrease up to 2.1 percent in 2020, said on Tuesday Gheorghe Pogea, interim minister of labour, Finance Minister. At present, the state contributes with 1.5 billion euros to the budget of pensions, therefore it is sustainable. Through the new law, we have a 0.5-percent diminution of the pensions' share in the GDP in 2010 and we'll reach a shrinkage of 2.1 percent in 2020,' said Pogea. According to the interim minister of labour, the law will set new ways for checking early retirements and disability pensions. At present in Romania there are 112,000 early retirements therefore the retirement earlier than 5 years than the age established by law will be banned, whereas the people who retired earlier illegally they will pay a fine accounting for 0.75 percent of the pension for each month of early retirement ahead of the term established by law. In the case of disability pensions, an expert will check whether the way of fulfilment of the pension file, after the enforcement of the new law, is legal. In the case of the existing disability pensions contracts are to be signed with labs and clinics for the identification of the people who receive disability pensions fraudulently.

Sursa: http://www.actmedia.eu

Tags: pensions percent public pension confidence retirement