Contribution to mandatory pension funds in Romania to rise by 1pp to 4.75% in January 2024

The contribution to the mandatory pension funds in Romania is supposed to increase from 3.75% currently to 4.75% as of January 2024, according to a Government’s draft emergency ordinance consulted by Economica.net.

Assuming that the total contribution to the pension system is maintained at 25% of the gross wage, the contribution to the first pillar, or mandatory pay-as-you-go state-managed pension system, will consequently decrease to 20.25%.

Under a provision of the ruling strategy drafted by the parliamentary majority formed last autumn, also included in the National Relaunch and Resilience Plan (PNRR), the contribution to the second pillar of the pension system is supposed to reach 4.75% by 2024.

The fund managers proposed a gradual increase, by 50bp in each of the two coming years: to 3.75% in January 2023 and 4.25% in January 2024.

Under the initial calendar sketched when the privately managed pension system was set up in 2008, the contribution to the second pillar should have reached 6% since 2016.

(Photo source: Designer491/Dreamstime.com)