Pension ABC

The unitary public pension system in Romania is ensured by the state and it offers the widest access to obtain the insured and beneficiary status, in terms of social security, both taking into account the number of participants and the set of advantages.

The public pension system offers the possibility of obtaining mandatorily or voluntarily the insured status to those of working age, with their domicile or residence in Romania.

Starting with 01.01.2011, the Romanian public pension system is regulated by Law no. 263/2010 concerning the unitary public pension system, with subsequent changes and additions.

Since January 1st 2008 the insured in the public system have to contribute to a mandatory private pension scheme. The affiliation is compulsory for people born after 1973 and voluntary for people born between 1963 and 1973.
The contributions (6% in 2016) are paid exclusively by the employee.

Additional private pensions are regulated by Law no. 204/2006. The National House of Public Pensions (CNPP) does not manage this pension system.

According to the provisions of art. 27, al. 2 from Law no. 263/2010 with subsequent changes and additions, the social security contribution quota differs depending on working conditions: normal, outstanding, special; as well as on other factors.
The categories of income submitted to social security contributions, the social security quota due to the state’s social security budget, as well as the payers of these contributions are regulated in the Fiscal Code.

Please find details on contributions in the Romanian Pension Landscape.

There are no provisions in the Romanian legislation regarding the refund of social security contributions. Those insured must pay social security contributions and they have the right to social security benefits, in line with Law no. 263/2010, with subsequent changes and additions.

There are no procedures to follow before leaving Romania regarding the public pension system in Romania.

Law no. 263/2010 with subsequent changes and additions ensures the granting of social security benefits representing an income of replacement granted in case of insured risks in terms of pension, aid or other types of benefits provided by the law, for losing all or part of the insured incomes, according to art 3 (k).
According to art. 51, the public pension system is comprised of the following pension categories:

a) old age pension
b) early retirement
c) partial early retirement
d) disability pension
e) survivor’s pension
In addition, according to the provisions of art. 121, besides pensions, the following benefits can be granted in the public pension system according to the law:
a) spa treatment, for the insured and the retired, different from the one paid from the Unique National Fund of healthcare benefits, according to the law
b) holiday vouchers for the insured
c) bereavement allowance, should the insured or retired person or one of their family members die

Currently, according to Law no. 263/2010 on the unitary public pension system with subsequent changes and additions, the minimum contribution period is of 15 years, both for women and men.

Yes, all contributions to the Romanian public pension system are taken into consideration, pursuant to European regulations on the coordination of social security systems and in accordance with bilateral agreements on social security signed by Romania (please see B4). Social security systems are coordinated by summing up the insured periods during the career of a migrant worker, in order to calculate and ensure the payment of pension benefits. This means that, when calculating the benefits pertaining to the migrant worker, the competent institution takes into consideration both the insured periods registered in their country, as well as those registered in other member states (or, in the case of agreements, in the other signatory state). Benefits are calculated by each state proportionately with the insured period registered according to national legislation (in line with the pro-rata temporis principle).

Romania, as an EU member state, applies starting with the 1st of January 2007, the EU accession date, the dispositions of European regulations on the coordination of social security systems. Currently, the EC Regulation no. 883/2004 on the coordination of social security systems together with its implementation regulation no. 987/2009 are in force and applicable. Until the 30th of April 2010, Regulations (EEC) no. 1408 and no. 574/72 were applied in the relations of Romania with the rest of the member states.

Bilateral agreements on social security signed by Romania until February 2016:

The Agreement between Romania and the Republic of Turkey in the field of social security, signed at Ankara on the 6th of July 1999, ratified by Law no. 551 from the 14th of October 2002, published in the Official Journal of Romania no. 785 from the 29th of October 2002; together with the Administrative Arrangement, signed at Bucharest on the 30th of May 2003 in order to apply the Agreement between Romania and the Republic of Turkey on social security, signed at Ankara on the 6th of July 1999, and approved by Government Decision no. 1311 from the 13th of November 2003, published in the Official Journal of Romania no. 883 from the 11th of December 2003.

The Agreement between Romania and the Republic of Macedonia on social security, signed at Bucharest on the 27th of February 2006, ratified by Law no. 326 from the 22nd of November 2006, published in the Official Journal no. 817 from the 30th of November 2007.

The Agreement between Romania and the Republic of Korea on social security, signed at Seoul on the 11th of September 2008, ratified by Lay no. 327 from the 27th of October 2009, published in the Official Journal of Romania no. 744 from the 2nd of November 2009; together with the Administrative Arrangement from the 21st of January 2010 for the application of the Agreement between Romania and the Republic of Korea on social security, approved by Government Decision no. 405 from the 28th of April 2010, published in the Official Journal no. 336 from May 2010.

The Agreement between Romania and Canada signed on the 19th of November 2009, at Ottawa, ratified by Law no. 183 from the 14th of October 2010, published in the Official Journal no. 719 from the 28th of October 2010; together with the Administrative Agreement, signed at Bucharest on the 1st of June 2010, between the Romanian and the Canadian Governments for the application of the Agreement on social security between Romania and Canada, approved by Government Decision no. 204 from the 2nd of March 2011, published in the Official Journal no. 173 from the 11th of March 2011.

The Agreement between Romania and the Republic of Moldova on social security, signed at Bucharest, on the 27th of April 2010, ratified by Law no. 130 from the 23rd of June 2011, published in the Official Journal no. 456 from the 29th of June 2011; together with the Administrative Arrangement, signed at Iasi on the 3rd of March 2012, for the application of the Agreement between Romania and the Republic of Moldova on social security, approved by Government Decision no. 752/2012, published in the Official Journal no. 561 from the 8th of August 2012.

The Agreement between Romania and the State of Israel on social security, signed at Jerusalem on the 28th of February 2011, ratified by Law no. 150/2012, published in the Official Journal, part I, no. 548 from the 6th of August 2012; together with the Administrative Arrangement, signed at Bucharest on the 3rd of September 2013, for the application of the Agreement between Romania and the State of Israel on social security, signed at Jerusalem on the 28th of February, approved by Government Decision no. 854 from the 6th of November 2013.

In accordance with provisions in art. 94, al.1 from the same law, the total amount of the pension benefit is calculated by multiplying the annual medium point registered by the insured with the value of a pension point.

The method of calculating the annual medium point is regulated in Section 6 – Pension Calculations of Law no. 263/2010. This method is based on the contributive principle according to which social security funds are calculated on the contributions owed by natural and legal persons involved in the public pension system. The rights to social benefits are granted in line with the social security contributions which were paid.

The application for one of the pension categories of the unitary public pension system through Law no. 263/2010 is done on request depending on the solicited pension category.

This depends, where the case may be, on

• the standard retirement age,
• the standard low retirement age,
• the minimum contribution period,
• the full contribution period,
• the contribution period of at least 8 years higher than the full contribution period provided by law,
• a medical certificate of one’s working capacity,
• a certificate stating the cause of death, if applicable.

The standard retirement age, the minimum and full contribution periods are regulated in art.53, according to the allocation provided in Annex 5 of the law, depending on the month and year of birth.

The standard retirement age is 65 for men. For women born in 1955 and after the standard retirement age is 60. It will be raised from 60 to 63 years of age until 2030.

In applying the supranational/international legal instruments, to which Romania is part of, those who moved in a foreign state can send their retirement application together with the papers proving the fulfilment of the requirements provided by law, via the social security institutions of their place of domicile. The documents will be sent to the competent territorial pension house from the last place of insurance in Romania.

In the case of people living in a state that does not apply any supranational/international legal instrument in terms of social security, the right to pension benefits from the Romanian public pension system ca be requested via an authorized representative named through a power of attorney in line with legal regulations.

Law no. 263/2010 on the unitary public pension system, with subsequent changes and additions, does not have any provisions on the application of non-cumulative regulations regarding benefits or incomes obtained in a foreign state when applying the European regulations on the coordination of social security systems.

The contribution period established according to the legislation of a state with which Romania applies a supranational/international legal instrument on the coordination of social security systems, confirmed as a contribution period by the social security institution of the state in question, is taken into account in cumulating the insured periods. In order to grant the pension benefits of the Romanian public pension system, benefits are calculated proportionally to the insured period registered according to national legislation (on the pro-rata temporis principle previously mentioned).

As for bilateral agreements on social security signed by Romania, the cumulation of insured periods is performed only should the person in question not have the right to national pension benefit.

The beneficiaries of the Romanian public pension system moved in a foreign state can receive, in the country where they have their domicile or permanent residence, their pension and other benefits set and paid by the territorial pension houses. The National House of Public Pensions makes payments via Citibank Europe plc, Dublin – Romanian branch.

The request of pension benefits transfer from the Romanian public pension system to another state implies the following:

• The beneficiary opens an account at the bank of his choice, in the country of his usual residence (applying European regulations and bilateral agreements in this field) or his domicile (applying the national legislation in the field of pensions), depending on the situation
• The beneficiary sends his bank details (the beneficiary’s full address, name and bank address, SWIFT/BIC/sort code/ABA code of his bank, if it is the case, as well as the international bank account number) to the paying institution (the territorial pension house where the pension file is registered).

Depending on the situation of the beneficiary, sending these details can be:

• Ensured via the social security institution, through contact forms and structured online documents – in the case of beneficiaries living in EU member states, EEA, Switzerland or in countries with which Romania has or had social security agreements or bilateral conventions.
• Direct; requests and required documents will be submitted or sent to the territorial pension house paying the benefits in question – in the case of beneficiaries living in a foreign state. In such a situation, the bank details can be sent:
  • at the initiative of those concerned; the right holder or the representative named through a special power of attorney submits or sends to the territorial pension house a declaration of transferring the rights granted to the beneficiaries of the public pension system. The declaration can be sent by post, fax or e-mail (scanned to the official e-mail address of the territorial pension house, published on the official website of the institution). The declaration has to be accompanied by a document confirming the bank details and by a copy of the right holder ID certifying his current domicile or usual residence, where the case may be.
  • At the initiative of the territorial pension house which sends to the right holder a declaration of transferring the rights granted to the beneficiaries of the public pension system, in order to be filled in.
• The beneficiaries who are non-residents confirm their existence by filling in and sending a life certificate. The life certificate represents an administrative verification tool which can be used by territorial pension houses, if beneficiaries live in a foreign state. The certificate is used to avoid undue payments or payments to non-resident beneficiaries whose situation has changed, influencing the obligation of the competent territorial pension house to pay pension benefits (for example, should the beneficiary die, his situation changes, therefore determining the suspension/cease of pension payment).