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

• • For judges and prosecutors, see Article I.1 of Law No. 282/2023.
• • For specialised auxiliary staff of the courts and the prosecutor’s offices attached to

them and staff working within the National Institute of Forensic Expertise, see Article VI.1 of Law No. 282/2023.

• • For Court of Auditors staff, see Article VIII of Law No. 282/2023.
• • For staff of the Diplomatic and Consular Corps, see Article IX.1 of Law No. 282/2023.
• • For parliamentary civil servants, see Article XII.3 of Law No. 282/2023.
• • For military and police staff, the target benefit ratio was already at 65% before the

reform and was not amended.

Thirdly, for several special pensions categories, the Law foresees a gradual increase in the number of months which form the basis for the calculation of the benefit ratio. This will mathematically, over time, reduce the gap between pensioners in the general regime and those benefitting from special regimes. With this readjustment of the percentage related to the obtained income the target benefit ratio will apply to a lower base, mathematically leading to lower special pensions:

• • For judges and prosecutors, see Article I of Law No. 282/2023.
• • For specialised auxiliary staff of the courts and the prosecutor’s offices attached to

them and staff working within the National Institute of Forensic Expertise, see Article VI of Law No. 282/2023.

• • For staff of the Diplomatic and Consular Corps, see Article IX of Law No. 282/2023,.
• • For parliamentary civil servants, see Articles XII and XIII of Law No. 282/2023.

Fourthly, the Law foresee that special pensions are to be updated every year based on the inflation rate, with a lag of two years. As demonstrated in the World Bank report (pages 40, 41 and 42), this means that over time the average benefit ratio of special pensions will converge towards that in the general system, which has more favourable indexation rules. For several special pension categories, pensions were already indexed on inflation before the reform. Going forward, this will be the case for all special pensions categories:

• • For judges and prosecutors, see Article I.6 of Law No. 282/2023.
• • For military pensions, see Article XIV of Law No. 282/2023.

Fifthly, the reform introduces higher taxation for special pensions above a certain threshold. As these pensions almost always include a non-contributory part that is funded by the State budget, the introduction of additional taxation increases the contributory nature of special pension regimes. Pensions in Romania are taxed at a 10% tax rate. This rate applies to the full pension, minus a fixed non-taxable income RON 2.000. Article XVIII of Law No. 282/2023 introduces a 15% tax rate for special pensions (only the non-contributory part) higher than the average net wage used at the time of the preparation of the previous year’s social security state budget, and of a 20% tax rate of personal income tax for pensions (non-contributory part) higher than the average gross wage used at the time of the preparation of the previous year’s social security state budget.

Finally, the reform removes the ability to collect more than one special pension. Beneficiaries eligible for more than one service pension must choose one. This is specified in Article XVII of Law No. 282/2023.

The minimum contribution period shall be similar to that applied in the public pension fund.

The general pension system includes a minimum contribution period of 15 years to be eligible to pensions. Law No. 282/2023 establishes that the minimum contribution period for all special