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Gov’t approves public pension system law principles

The Romanian Government on Wednesday approved seven principles underpinning the draft law for the public pension system, which should come into force on January 1, 2010, Prime Minister Emil Boc announced after a Government meeting the same day.
‘The same as we want a uniform pay law for all the employees paid by public money, so we want a uniform pension law. The most important step we took today was to agree that there will be only one public pension law. This means all pensioners will be equal before law, while the principle of pay according to contributions will make sure everybody will get a pension commensurate with the personal contributions to the pension fund,’ said Boc.
In other words, people earning bigger salaries and paying higher pension contributions will have a bigger old age pension, said Boc.
He added that the new law is conceived as a justice act in the pension system, and the Government wants to finalise the draft law this year, so that the law may come into force on January 1, 2010.
The seven principles approved are single treatment, obligation, pay according to contributions, equal treatment, repartition, social solidarity and autonomy.
The Government has excluded the occupational principle in order to avoid any misunderstanding that it would attempt to find some puncture in the law through which the existing special laws might be reintroduced through the backdoor, Boc explained.

The single treatment principle states that the Government organises and guarantees the public pension system and proposes the existence of a uniform pension system for all the salaried professional categories. Pensions will be computed against the personal contributions of each employee and the length of the contributions to the pubic pension system.
According to the obligation principles, individuals and legal persons must contribute to the public pension system, as social security rights will be correlated with the obligation being met.
Social security funds will be set up on contributions owed by individual and legal persons that are contributors to the public pension system.
The contributors to the public pension system – taxpayers and beneficiaries – will be extended equal treatment without discrimination as far as the rights and obligations mentioned in the law are concerned. This fourth principle stipulates that all pensions will be equally computed for all the employees. The funds collected will be redistributed for the payment of the obligations incumbent on the public system.
The new law introduces the principle of social solidarity, according to which the contributors to the public pension system reciprocally assume obligations and qualify for rights in the prevention, containment or dispelling of the social risks mentioned in the law.
There will be autonomous management for the public pension system, to be entrusted to pension houses.

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