Romania to raise retirement age for magistrates to 65 years, cap pensions

During a press conference held on Tuesday, July 29, Romanian prime minister Ilie Bolojan presented the main measures from the magistrates' pension reform project, which will be included in the third fiscal package. The project includes raising the retirement age and capping pensions.

The reform is urgent and necessary, said the official, who also warned that Romania risks losing over EUR 800 million from the National Recovery and Resilience facility if the modifications are not done. The grants and loans guaranteed by the European Commission hinge on a series of reforms that Romania has to complete.

Among the essential changes in the proposal are raising the retirement age for magistrates to 65 years, increasing the minimum length of service to 35 years, and capping the pension to no more than 70% of the net salary, compared to the current formula, which allows pensions to go higher than active income.

Bolojan explained that current public system salary laws are unclear, allow interpretations, and have generated numerous lawsuits in court. “This has led to us having over 20,000 legal actions initiated by people working in the justice system, regarding social discrimination, the granting of bonuses, unsuitable working conditions, or administrative acts validated by court rulings,” said the prime minister.

According to him, the financial effects of these lawsuits were enormous for the Romanian state, amounting to RON 10 billion (EUR 2 billion). “I understand there is still a stock of rulings, which means other billions of lei, significant sums of money for the Romanian state, which cannot be budgeted from one year to the next,” said Ilie Bolojan. In this context, the PM emphasized the need for a salary law that eliminates ambiguities.

Aside from salaries, a wider overhaul is needed, the official noted. The government aims to create a justice system made out of mature professionals. Ilie Bolojan explained that one of the biggest problems in the special pension system is the too-early retirement of magistrates.

“Two-thirds of magistrates in Romania retire at 47–49 years old. It is a problem not only of quality, but also of sustainability in the coming years, because we no longer have people to replace them,” said the prime minister.

Another point criticized by the head of the government is the way pensions are calculated, in relation to active income. The proposal is that a magistrate’s pension be no more than 70% of the last net salary, not 80% of the gross salary, which exceeds the net salary. “The actual calculation is based on gross income. It is proposed that there be a percentage of 55% of the average of the last 7 years, but not more than 70% of the net salary,” Bolojan specified.