Starting in 2025, the minimum pension at retirement age in Romania will undergo significant changes, transitioning from a fixed amount to a calculation based on the gross minimum wage, as mandated by Law 127/2019. This adjustment aims to more closely align pension benefits with individual contributions and encourage long-term legal employment.
For individuals with between 10 and 14 years of service, the new calculation will begin at 40% of the gross minimum wage, with an additional percentage point added for each year worked beyond ten. With the minimum wage expected to be around 2,300 lei, a pensioner with 12 years of contributions would receive approximately 966 lei, reflecting a notable increase from the previous social allowance of 800 lei.
Once a worker surpasses 15 years of service, the percentage rises to 45%, plus an additional 1% for each subsequent year, capped at a maximum of 75%. This means that someone who has worked for 20 years will receive at least 1,150 lei, or 50% of the minimum wage in the current scenario. This formula is designed to reward each year of service, thus reducing disparities among pensioners.
Special provisions exist for individuals with severe disabilities or blindness, who will still benefit from 40% of the minimum wage even if they have less than 10 years of contributions. In these cases, the state will cover the difference between the calculated pension and the guaranteed minimum threshold.
Importantly, the minimum pension is only granted upon request from the eligible person, and the National House of Pensions will verify any additional pension income. If this income exceeds the resulting minimum amount, the supplementary support will no longer be provided.
In Romania, the law stipulates that a pension for the age limit can be granted to those who have worked for a minimum of 15 years. With the recalculation initiated in September 2024, the pension amount has been modified to reflect a more equitable system.
The current calculation method involves dividing the accumulated points by 12 to determine the average monthly income. For example, an individual with 15 years of service would have accumulated 85 points, leading to a calculation of 574 lei (85 points divided by 12, then multiplied by the reference point value of 81 lei).
However, if this calculated pension falls below the minimum guaranteed pension of 1,281 lei, the state will supplement the difference to ensure beneficiaries receive at least this minimum amount.
Moreover, the same law that increased pensions for those with 15 years of service also benefits those with a full term of contributions. For example, those with 26 to 30 years of work will earn an additional 0.50 points per year, while those with 31 to 35 years will receive an extra 0.75 points per year. For individuals who have worked for more than 35 years, the increase is set at 1 point per year.
Additionally, pensions may increase by 0.25 points for legal interruptions, such as time spent in the army, unemployment, or pursuing higher education. Notably, medical leaves before April 1, 2001, are counted as contributory service, while those between April 1, 2001, and January 1, 2006, are not considered in the calculations.
The introduction of the new pension law in September 2024 promised to enhance the financial well-being of many Romanians. However, there are reports of some individuals not seeing any increase in their pensions, raising concerns about the effectiveness of the reforms. Despite this, the Ministry of Labor assures that no seniors have experienced a reduction in their income.
Moreover, some elderly citizens have faced delays in receiving their owed payments, with recalculation decisions only being issued in May, causing frustration among beneficiaries who have been waiting for their rightful pensions.
As Romania approaches 2025, the shift to a more dynamic pension calculation system reflects a broader trend of reform aimed at ensuring fairness and sustainability within the social security framework. These changes are expected to provide a more equitable distribution of benefits, rewarding individuals based on their contributions and encouraging a culture of formal employment.
