Romania's Pension System Between Present Restrictions and Future Exigencies

Abstract

In Romania of today the largest part of available incomes at old age is ensured by pensions, and the most important source is constituted by the public system. The reform of the multipillar type system - is delayed, already regulated but still partially non-operational - is aimed to the youth of today as future or junior contributors to the system. Only young persons under 35 might plan and think about the level and structure of the intended old age pension. Older generations do not have a viable perspective towards financial independence in old age; quite on the contrary they are faced with far more limited options, which include: - participation to the public system, but the expected pensions shall be comparatively far more diminished (in accordance with estimates, the transfer rate in the public system shall be substantially diminished); - the contribution to funded private systems, but on a pretty high background of uncertainty - distrust against market operators, diminished possibilities of contribution due to low incomes, low estimated rates of profitability (for shorter contribution' periods); - The recourse to specific social assistance services for the third age as addition is more a desiderate than an alternative, Romania having a lot more to achieve in this sense. The projected system is not adequate for persons with low incomes or for the medium term future pensioners.