Pension law change pushes Romanian generals into early retirement

Hundreds of employees from Romania’s military structures, including secret service generals, police officers and military commanders have asked to retire as the Government and the majority coalition announced they would change the way pensions for these military structures are calculated. The list of new retirees includes 12 generals of the Romanian Intelligence Service, the head of the Gendarmerie, army generals and police commissioners. Moreover, around 700 policemen have filed applications for retirement since last Friday, said the interior minister Carmen Dan. By comparison, over 3,200 employees of the Interior Ministry have retired since the beginning of this year. The average retirement age was 55. The massive volume of retirement requests is related to the Government’s recent plan to amend the special pensions law, which would result in lower pensions once the changes become effective. Those who retire before the law is amended would still receive the high pensions. Policemen, magistrates, diplomats and other categories follow a different pension system than most Romanians and have higher pensions. A number of 184,000 former soldiers, policemen or employees of the Romanian Intelligence Service currently receive military pensions with an average value of RON 3,000 (EUR 658) per month. The state spends RON 6.6 billion (EUR 1.4 billion) a year on these categories of pensioners. However, the coalition leaders are worried that the special pension burden will double in the following years if the law is not amended. According to the existing law, special pensions increase with the same amount as salaries in these sectors. As the Government plans to double the salaries of active military and justice personnel in the next years, the special pensions would also double. The Labor Ministry is currently drafting an ordinance that aims to change the military pension law. The bill provides that military pensions won’t increase when the wages of active militaries increase. Moreover, the coalition leaders are also looking to change the way the initial pension is calculated, given that there are many cases in which retired military or magistrates get higher pensions than the salaries of active ones. The special pensions are called this way because they don’t follow the same rules at the regular state pensions and are not based on how much an employee has actually contributed to the state pension budget. The pensions for military, for example, are calculated at 80% of the average salary in 12 months of their last 5 years in active duty. A part of this pension is paid from the state pension budget while the rest is paid by the Defense Ministry, in the case of former military, or by the Interior Ministry, in the case of former policemen. Magistrates, MPs, diplomats also get special pensions. A former magistrate has the highest special pension in Romania, of some RON 41,000 (EUR 9,000) per month. Romania pays EUR 105 mln special pensions monthly