Romania : Pensions Policy Note

This report discusses pension reform which took place in 2001 as a result of deficits which began in the 1990s. Important changes included increasing retirement ages, and the introduction of a new point based benefit formula, taking into account the entire work history of the employee, in order to strengthen the link between contributions and benefits. These actions improved pension system financial performance sufficiently to achieve a slight surplus in 2006 and 2007. Despite progress in pension system reforms, the combination of recent increases in benefit levels, the aging of the population, and the absence of a rule for benefit indexation has once again brought the system s long term financial sustainability into question. Some other challenges: high contribution rates spur the growth of informal employment; low retirement ages increase fiscal pressures; and the possibility of generous early retirement provides incentive for workers to leave formal sector employment. The report suggests several policy options to improve the pension situation, the first of which is to increase the retirement age. The report ends with annexes.

Bibliographic Details

Main Author:	World Bank
Format:	Policy Note biblioteca
Language:	English en_US
Published:	Washington, DC 2008-11-11
Subjects:	AVERAGE WAGE, AVERAGE WAGES, BASIC PENSION, BENEFIT ADJUSTMENTS, BENEFIT FORMULA, BENEFIT INDEXATION, BENEFIT LEVELS, BENEFIT RATES, CONTRIBUTION BASE, CONTRIBUTION RATE, CONTRIBUTION RATES, DEFICITS, DISABILITY, DISABILITY PENSIONS, EARLY RETIREMENT, EARNING, ELDERLY, EMPLOYEE, EMPLOYMENT, EQUAL OPPORTUNITIES, EU, FINANCES, FINANCIAL CRISIS, FINANCIAL PERFORMANCE, FINANCIAL SUSTAINABILITY, FISCAL DEFICIT, FORMAL PENSION, FORMAL PENSION SYSTEM, FUNDED ACCOUNT, GENDER, GENDER EQUITY, GOVERNMENT BUDGETS, GROSS REPLACEMENT RATES, GROSS WAGE, GROSS WAGES, HEALTH INSURANCE, HIGH WAGE, HOME, INDIVIDUAL ACCOUNTS, INFLATION, INFLATION INDEXATION, INFORMAL EMPLOYMENT, INFORMAL SECTOR, INFORMATION MANAGEMENT, INFORMATION SYSTEMS, INFORMATION TECHNOLOGY, INTERNATIONAL FINANCIAL CRISIS, INTERNATIONAL STANDARDS, JOBS, LABOR COSTS, LABOR MARKET, LABOR MARKETS, LEGISLATION, LIFE EXPECTANCY, LIVING STANDARDS, MALE WORKERS, MARKET ECONOMY, MINIMUM INCOME, PAYROLL TAXES, PENSION, PENSION ADMINISTRATION, PENSION BENEFITS, PENSION CONTRIBUTION, PENSION COVERAGE, PENSION EXPENDITURES, PENSION FUND, PENSION PLAN, PENSION SCHEME, PENSION SYSTEM, PENSION SYSTEM REFORMS, PENSIONERS, PENSIONS, PRICE INDEXATION, PRIVATE PENSION, PRIVATE PENSION FUNDS, PRIVATE PILLAR, PUBLIC PENSION, PUBLIC PENSIONS, RATE OF RETURN, REAL WAGE, REPLACEMENT RATE, REPLACEMENT RATES, RETIREES, RETIREMENT, RETIREMENT AGE, RETIREMENT AGES, RETIREMENT BENEFITS, RETIREMENT INCOME, REVENUE COLLECTION, SOCIAL ASSISTANCE, SOCIAL INSURANCE, SOCIAL PROTECTION, STATE ENTERPRISES, TAX, UNEMPLOYMENT, WAGE GROWTH, WILL, WORKER, WORKER CONTRIBUTIONS, WORKERS,
Online Access:	http://documents.worldbank.org/curated/en/2008/11/16797513/romania-pensions-policy-note http://hdl.handle.net/10986/18912
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