Employers could pay more money for the private pensions of the employees, according to a recently submitted normative act in the Senate, the amounts transferred monthly in the funds of Pillar 2 being deductible.
Employers could pay more money for employees' private pensions. Photo archive
Specifically, according to the project registered on September 30 in the Senate, it is proposed that, optionally, the employer will be able to contribute additionally to the compulsory contribution of 4.75 % for the Pillar 2 of privately administered pensions.
If the project is adopted, the additional contributions will be deductible within 150 euros (approximately 762 lei, calculated at the NBR rate of 1 EUR = 5,0811 RON for October 1, 2025) monthly/participant from the profit tax or from the tax on the income of the micro -enterprises, according to the tax legislation in force.
The mechanism by which the additional contributions in the participants' accounts are to be established by methodological norms, approved by Government decision, within 60 days from the entry into force of the project will be paid, deduces.
“The reform initiated by the Law no.411/2004 on the privately administered pension funds aims to sustain the pension system in Romania, by accumulating in the individual accounts of the employees some contributions to ensure, by complementarity with the pensions of Pillar I, the rate of replacement of the salary by pension as close to the level of the developed states of the European Union ””is shown in the exposure of reasons.
According to her, unfortunately, although the level of individual contributions should have reached over 4 years at a level of 6% of the gross income of the employee, the growth caldendar to 2.5% constantly suffered blocks (in 2009 and 2015) and even regress (2017) when the rate of 5.1% was reduced to 3.75%.
“This legislative proposal creates the necessary mechanism, so that, in addition to the compulsory contribution of 4.75%, the employer can contribute additionally to the participant's account to Pillar II, within the limit of 150 euros/month, with the possibility of deducting this amount from the tax on profit or from the tax on the income of the micro -enterprises”is shown in the quoted document.
According to the initiators, this legislative change would produce the following favorable short, medium and long term effects:
– the option of transferring a higher contribution would allow the employer to have more employee loyalty tools at hand;
– the higher contributions would generate a superior asset of the participant in the privately administered pension fund and a pension for a much older age limit;
– the money transferred in addition to the participant's account will go, through specific financial instruments, to the financing of the national economic environment;
– Unlike Pillar III of pensions in which the contributions are sporadic, slightly broadcast and very rarely reached maturity, the proposed measure allows the continuity of transfers in the account of the same beneficiary.
“(…) in the medium and long term the effects of this measure generates a positive budgetary impact, as well as effects of multiplication in the economy, solving, at the same time, a very complex problem – Sustainability of national pension systems after 2030”, The initiators say.
