Government Unveils Sweeping Pension Reforms
Special Pensions, Including Military, Targeted for Fall Overhaul
Prime Minister Ilie Bolojan has announced a significant legislative push this autumn aimed at reforming Romania’s special pension system, with a particular focus on military pensions. A separate package targeting magistrates’ pensions is slated for adoption in August, driven by EU recovery fund requirements.
Magistrates’ Pensions First, Then the Rest
The reform of magistrates’ pensions is nearing completion and is expected to be publicly debated soon. Key changes include raising the retirement age to 65 and aligning pension values with European standards. These adjustments will apply prospectively to future retirees.
โThe reform of the special pensions, those regarding magistrates should enter this package that should be adopted during August. This is also a time pressure, due to the conditioning of a milestone (from PNRR – n.red.) and we have to recover several hundred million euros that are blocked, because we did not close this conditioning.โ
โIlie Bolojan
Beyond magistrates, Bolojan indicated a broader package would address other special pensions this fall. This includes those for military personnel, police, gendarmes, and former intelligence service members, many of whom currently face what he described as unclear and unpredictable retirement systems.
Addressing Economic Sustainability
The reforms are partly driven by concerns over economic sustainability, particularly the impact of early retirements. Bolojan highlighted that early retirement significantly shrinks the active workforce, exacerbating demographic challenges. Romania’s workforce participation rate for those aged 55-64 is lower than many EU counterparts, hovering around 45% compared to the EU average of over 50% in some age brackets.
“The problems on the component of early pension are related to the sustainability of our economy,” Bolojan stated. He emphasized the need to encourage greater participation in the labor market, noting that a healthy economy requires more contributors relative to beneficiaries.
The government also considers tightening eligibility for unemployment benefits, potentially reducing the duration from one year to six months as part of a broader package to encourage re-entry into employment.
The reform aims to create clearer, more predictable salary and pension mechanisms, reducing the likelihood of costly legal disputes that have burdened the Romanian state. The goal is to foster a stable system that, while not reducing current income levels, eliminates ambiguity and legal challenges.