WB unveils alternative scenarios for Romania's special pension reform

The Romanian Labour Ministry announced that it received the recommendations drafted by the World Bank (WB) for amending the so-called "special pensions" for civilian and military personnel, respectively.

The final draft of the law with this end will be passed by the lawmakers within a couple of weeks, minister Marius Budai claims.

However, the alternative scenarios recommended by the WB, as disclosed by the Labour Ministry, are either not legally or politically feasible or fail to generate the desired effects.

"The best approach would be to reform the system of special pensions entirely", according to the WB report quoted by the Ministry of Labour, which also says that "for this type of reform, it is important to pay special attention to previous [failed] reform attempts and legal actions so that mistakes from the past are not repeated," Digi24 reported.

Although it doesn't provide a single specific alternative for the cumbersome "special pensions" dilemma, the WB outlines several peculiarities of the system. For instance, the Government tops up (heavily) the pensions for civil aviation personnel – although the recipients are employees of private companies.

Secondly, the magistrates' pensions are indexed based on different (higher) indices, which leads to widening discrepancies between their pensions and the normal pensions.

Finally, not all the recipients of special pensions are equally special: the 10% smallest special pensions (lowest decile) are 3.5 times lower compared to the 10% highest special pensions (highest decile).

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