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Starting 1st September, 2024, Law 360/2023 on the public pension system, will bring a number of significant changes to the public pension system in Romania.
One of the amendments aims to encourage people who have already contributed for 25 years to the public pension system in Romania to continue working. In this regard, Article 2 of Law No 263/2010 on the unitary public pension system stipulated that the public pension system is organized and operates on the basis of the following principles:
Article 2 of Law No. 360/2023 adds a new principle, that of stability of insurance in the public pension system in Romania. According to it, persons who have completed a contributory contribution period of more than 25 years will benefit from an additional number of points.
Specifically, according to Article 39 para. (1) of Law No 360/2023, in the public pension system, the contributory contribution period is the sum of the periods for which the contribution to the state social insurance budget was due by the insured person and, where applicable, by the employer.
Article 85 para. (3) provides that a number of stability points shall be awarded for contributory contribution periods of more than 25 years of contributory service, as follows:
Law No. 360/2023 brings changes to the pension calculation formula, updating the pension point and adjusting the indexing criteria. It emphasizes equity and transparency in pension calculations, introducing adjustment elements for inflation and economic growth.
If in Law no. 263/2010, according to Art. 94 para. (1), the amount of the pension is determined by multiplying the average annual score achieved by the insured person by the value of one pension point, the amount of the pension under the new law (Art. 83 para. (1)), stipulates that it is determined by multiplying the total number of points earned by the insured person by the value of a reference point.
Moreover, Article 84 para. (1) defines the value of the reference point as the ratio between the value of the current pension point and the average level of contributory service provided for by the previous legislation, set at 25 years. According to Art. 84 para. (6), in the year 2024, the amount of the pension point foreseen for the year 2023, i.e. 1,785 lei, is increased by 13.8% and is 2,032 lei.
According to Art. 84 para. (2), from September 1, 2024, the value of the reference point will be 81 lei.
While under the old regulation, the standard retirement age was 65 for men and 63 for women, the new regulation modifies the retirement age, establishing gradual transitions to balance the differences between the sexes.
According to Article 47 of Law 360/2023, the standard retirement age will be 65 for both men and women.
Thereafter, this age will be attained by increasing the standard retirement ages, according to the staggering set out in Annex no. 5 to the law.
Law no. 263/2010 | Law no. 360/2023 |
Article 53: The standard retirement age is 65 for men and 63 for women. | Article 47: The standard retirement age is 65 for both men and women. |
This age shall be attained by increasing the standard retirement ages, in accordance with the staggering of retirement ages set out in Annex 5. | This age shall be attained by increasing the standard retirement ages, in accordance with the staggering of retirement ages set out in Annex 5. |
According to Article 51 of Law 360/2023, women who have completed the full contributory contribution period and who have given birth and raised children up to the age of 16 will benefit from a reduction of the standard retirement age by periods ranging from 6 months to 3 and a half years, depending on the number of children.
For example, women who have raised one child will be able to retire 6 months earlier, while those who have raised seven or more children will benefit from a reduction of 3 and a half years.
The reduced retirement age also applies to women who have raised adopted children for at least 13 years, as the law treats newborn and adopted children equally in terms of early retirement benefits.
The amendment made by Law 360/2023 regarding early retirement reflects a significant adjustment of the conditions of access to this form of retirement. In Law No 263/2010, early retirement was available only to persons who had at least 8 years of contribution period longer than the full contribution period required by law.
In contrast, Law No 360/2023 makes access to early retirement more flexible, allowing retirement up to 5 years before the standard age for all those who have completed the full contributory contribution period or who have exceeded it by up to 5 years.
This change widens the base of people eligible for early retirement, recognizing the merits of those who have reached the full contribution period without imposing such a high additional threshold.
Law no. 263/2010 | Law no. 360/2023 |
Article 62 paragraph. (1): Early retirement shall be granted no later than 5 years before reaching the standard retirement age to persons who have completed at least 8 years of contribution service in excess of the full contribution period required by law. | Article 58 paragraph. (1): Early retirement is granted no later than 5 years before reaching the standard retirement age to persons who have completed the full contributory contribution period, as stipulated in Annex no. 5 to the Law, as well as to those who have exceeded the full contributory contribution period by up to 5 years. |
Law No. 360/2023 redefines the degrees of disability. According to Article 62 para. (1), depending on the degree of reduction in work capacity, disability is classified as follows:
At the same time, Law no. 360/2023 also introduces changes with regard to the categories of persons who are entitled to disability pension. According to Article 61 para. (1), the disability pension is due to persons who have completed periods of contributory contribution in the public pension system, who have not reached the standard retirement age and who have reduced working capacity due to:
Master’s and doctorate studies are introduced as non-contributory periods assimilated to the contribution period, in addition to university, military service, disability pension, sick leave, parental leave, paid unemployment, deportation, imprisonment and political imprisonment, provided for by the legislation in force. The minimum contribution period is 15 years. 0.25 points are awarded for each month of the period treated as equivalent.
In conclusion, Law 360/2023 introduces important changes, reflecting the need to adapt the pension system to the current economic and social context. The amendments aim to improve the fairness, transparency and sustainability of the public pension system in Romania.
Accace Romania’s specialists in the field of payroll and personnel administration are at your disposal for any further clarifications in view of the adoption of the amendments to the public pension system in Romania.