Occupational pension system enforced in Romania as of February

The Law on Occupational Pensions will enter into force in Romania on February 7, Adevarul daily announced.

The provisions of Law 1/2020 indicate how much money the employers and employees can contribute to such funds (Pillar IV) on a monthly basis, the daily commented.

Specifically, Law 1/2020 stipulates that the employer decides whether or not to propose to the employee an occupational pension scheme.

This has to be included in the employment contract. Then, the employer will sign a contract with a fund manager company, authorized by the state, and will ask the employees to fill in the application to join Pillar IV. The occupational pension is absolutely optional for the employees.

The contributions will be collected and paid by the employer, but these can be divided between the employer and the employee, as established in the pension scheme drawn up by the employer and the application for membership signed by the employee.

With regard to the amount of the contributions, they can be as large as one third of the employee's gross salary, but they should not exceed half of the net salary.

The employer may establish differentiated amounts of his own contribution for his employees on the basis of seniority, function or salary rights.

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