The Romanian Parliament has approved a private pension law, to come into effect in early 2008.
One of its main stipulations will be the compulsory collection of contributions to private pension funds. Mandatory contributions will be levied on taxpayers who are below 35 years.
Romania – a country of 22.5 million inhabitants, of which 6.2 million are pensioners and 4.4 million are registered taxpayers – adopted the new pension scheme under pressure from the European Union.
The Romanian Labor Authorities announced that private pension funds, which will need to be established before 2008, will at first receive 2% of monthly wages. This percentage of contribution will gradually be raised to 6% after another eight years (i.e. by 2016).
In addition to contributing to private pension funds from 2008 taxpayers will have to continue contributing to the state pension fund. Currently, Romanians pay 9.5% of their wages to it. According to the new law, taxpayers below the age of 45 will have the option to contribute to the new private funds.