Public Pensions Reform in Romania. How Affect the Public Finance Sustainability?

Cristian Socol (), Marius Marinas, Aura-Gabriela Socol and Iuliana Dascalu
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Aura-Gabriela Socol: Academy of Economic Studies, Department of Economics, Bucharest, Romania
Iuliana Dascalu: Ministry of Finance, Bucharest, Romania

Timisoara Journal of Economics, 2011, vol. 4, issue 4(16), 221-230

Abstract: This paper deals with the problem of the public pension system’s sustainability in Romania and its impact upon the sustainability of the public finance. Thus, the public pension deficit increased in the last three years, caused by the unsustainable increase of pensions during expansionary years and by decrease of number of taxpayers in the economy. Unfortunately, the pressure on public pension system will continue in the next decades due to decline of the total population and of the working age population and to increasing share of the older people. The first part of the paper is an explanation for the factors which affect the public pension system, and it presents this system’s vulnerabilities. The second part is a brief presentation of the effects of the reforms made after December ’89, with reference to the public pension system. The third part outlines the impact of the unitary pension law upon the improvement of the balancing position of the public pension system. The last part makes an analysis for the budget impact of the unitary pension law, outlining the comparison between the basic scenario – keeping the current system and the alternative scenario, which provides a rich package of reforms with reference to this field.

Keywords: public pensions system; private pensions system; finance sustainability; reforms; ageing problem (search for similar items in EconPapers)
JEL-codes: H75 J26 (search for similar items in EconPapers)
Date: 2011
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