“There are at least 3 arguments for which the state has the right to regulate the reimbursements in Pillar 2 of pensions.” A Romanian economist, with an international career, explains what escapes those who criticize a government decision

“The CAS paid by the employees is the only source of financing of the Pillar 2 of pensions, and because the pension fund was strongly deficient after 2008, the state subsidized from other taxes and taxes. back! ”. In order to be able to read the full interview with the expert who worked in several international EU, USAID or World Bank, you must subscribe here:

A draft law discussed on Friday in the Government, by which the over 9 million Romanians who have private pensions (Pillar II, mandatory and Pillar III, optional) will not be able to withdraw all their money once, after obtaining the retirement decision, as at present, but a maximum of 25% of the amount, to arouse a lot of criticisms. Including, leaders from UDMR and USR, parties that are part of the ruling coalition, have declared themselves against the draft law.

In this context, I asked the economist with international experience Victor Giosan how it happens in other countries with the money in Pillar 2 of pensions and if the explanations of the representatives of the Government for which they made this decision are standing.

“There are at least three arguments in favor of the right of the state to regulate the reimbursements in the Pillar 2 of pensions:

• CAS (no- social insurance contribution) is the unique source of pillar financing 1 and 2. It is actually a state guarantee tax: the current generation of taxpayers pays the current generation of pensioners, under the state guarantee that the next generation of taxpayers will pay its pension in the future.

• The pension fund was strongly deficient after 2008, even if the contributions for Pillar 2 were left to finance Pillar 1, which means that the state has subsidized from other taxes and taxes.

• Moreover, in the calculation of the pension point within Pillar 1, the average gross average salary is used, so including the 4.75% contribution dedicated to the financing of the pillar 2. In other words, the contribution for pillar 2 directly influences the pension received on Pillar 1.

Under today's conditions – with a contribution to pillar 2 of 4.75% – the influence on the calculation of points on Pillar 1 is 19%. Obviously, the number of points could be calculated otherwise, based on the net salary, but, in recent decades, the number of pension points on Pillar 1 has set based on the gross salary, which also includes the contribution to Pillar 2.

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