Report and Policy Brief

Who will pay our pensions? Apocalypse in 2030

EFOR, the Association of Private Pension Funds and the Department of Sociology of the University of Bucharest have debated Seven scenarios for 2030 for the future of pensions in a roundtable that took place on Nov 20.

Keynote speakers: Georgeta Bratu, secretary of state in the Ministry of Labor; Ileana Ciutan, president of the National Pension Fund; Ionut Dumitru, Fiscal Council; Bogdan Hossu, president of Cartel Alfa (tradse union confederation); Mircea Oancea, CSSPP, Michael Coca Cosma (APAPR), Suzana Dobre, analyst at EFOR; Marian Preda, Dean, Faculty of Sociology, University of Bucharest; economists, representatives of pension funds, businesses, trade unions, representatives of the IMF and the World Bank.
In 2011, more than half of Romania’s deficit was generated by the public pension system. Pensioners are already more than those who pay contributions to the first Pillar. Paradoxically, we have these major imbalances while at the same time the population of Romania is one of the youngest in Europe. Generations born in 1967 and the years immediately following are the most numerous; these people are now of working age and will retire starting from 2030. How would the pension system survive this shock, if it already has major imbalances now?

We analyzed seven scenarios with various decisions on the pension system and their effects over 30 years. The result is that the average pension would be 26% of the salary, but some decisions may even lead to a pension of 17%. Pension fund deficit will be 2.5% of GDP but some populist decisions can produce even a deficit of 8.5% of GDP. What is to be done, if we do not want the public finances to go bankrupt?

The complete solution here (Romanian only): Cartea alba a pensiilor RO_11nov

and in brief, here (Romanian only): Pol-Brief- 11 nov




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