Preliminary assessment of the third payment request of Romania (2024)

Number: 215       Related Measure: Reform of the public pension system

Name of the Milestone: Entry into force of the legislative framework for reducing expenditure on special pensions Qualitative Indicator: Provision in the law indicating the entry into force of the Time: Q4 2022 legislative framework for reducing the expenditure on special pensions Context:

The objective of this measure is to reform the public pension system. The main goal of the reform is to make the pension system more equitable and more fiscally sustainable.

Milestone #215 requires the entry into force of the legislative framework for reducing expenditure on special pensions.

Milestone #215 is the fourth milestone or target of the reform, and it follows the completion of milestone #211, related to the contracting of technical assistance to prepare analysis and proposals for a reform of the pensions system, milestone #212, related to setting up a monitoring committee, and milestone #213, related to the entry into force of amendments to the regulatory framework to ensure the sustainability of Pillar 2 pensions. It will be followed by milestone #214 covering the reform of the general pension system.

The reform had a final expected date for implementation on 30 March 2023.

Evidence provided:

The following evidence was provided:

  i.    Summary document duly justifying how the milestone (including all the constitutive
        elements) was satisfactorily fulfilled.
  ii.   Copy of Law No. 282/2023 on the amendment and addition of legislative acts in the field of
        service pensions and Law No. 227/2015 on the Fiscal Code, published in the Official Journal
        No. 950 published on 20 October 2023, and entering into force on 1 January 2024.
 iii.   Copy of the World Bank report on “Analysis, impact assessment and recommendations for
        reform of special pensions” (hereinafter referred to as “World Bank report”) and a link to
        the report: BM_Raport_analiza_impact_reforma_pensiilor_speciale_2023.pdf (mmuncii.ro)
 iv.    Copy of Constitutional Court Decision No 467 of 2 August 2023 on the objection of
        unconstitutionality of Articles I to IV, XIII (5) and (6) and XV of the Law amending certain
        legislative acts in the field of service pensions and Law No 227/2015 on the Fiscal Code,
        published in the Official Journal No. 191 published on 7 August 2023.

Analysis:

The justifications and substantiating evidence provided by the Romanian authorities cover all constitutive elements of the milestone. Specifically:

Entry into force of the legislative framework for reducing expenditure on special pensions.

The Law No. 282/2023 on the amendment and addition of legislative acts in the field of service pensions and Law No. 227/2015 on the Fiscal Code (hereinafter referred to as “Law No. 282/2023”) was published in the Official Journal No. 950 on 20 October 2023. According to its article XIX, Law