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European Commission calls on Romania to include military pensions in pension system reform, based on contributory
The European Commission (EC) has officially asked Romania to include the so-called “military pensions” in the reform of the pension system, which will be based on the contributive principle, Economedia announced, quoting sources familiar with the negotiations within the Government.
The bigger picture, however, concerns Romania’s commitment under PNRR to abolish all “special pensions” as of Q1 next year, a target likely to derail the entire EUR 28 bln Resilience Facility program in the country.
The so-called “military pensions” are those currently paid not only to retired staff of the Army but also to former employees of the (many) intelligence services. They account for the largest part of the so-called “special pensions.”
In turn, the “special pensions” cost the public budget (as opposed to the social security budget) increasing amounts of money.
Under the Relaunch and Resilience National Program (PNRR), Romania pledged to phase out the “special pensions” under a new Pension Law to be enforced during Q1 next year, Economedia explains.
An impossible mission, given lawmakers’ past attempts to eliminate or at least curb the rise of the “special pensions”, attempts that were constantly rejected by the Constitutional Court.
Instead of focusing on this high target, the Government of Romania is constantly challenging the 9.4%-of-GDP cap included in the PNRR for the public pension system’s expenditures.
The topic of the “military pensions” may be similarly used by the Government of Romania as a more or less “legitimate” reason for scrapping the entire pension system reform.