The pension formula in Romania: Inefficiencies and possible solutions

Artikel

The introduction of the correction index in the mechanism of determining pension benefits in Ro mania in 2013 has led to an inefficient formula which generates differences between the incomes received by pen sioners with the same level of contributions depending of the year of retirement. This paper reveals the mechanism through which these inefficien cies are generated, their consequences and analyzes the formula proposed by a new pension law against this issu e. We conclude that the new formula has the potential to solve this problem, but with a relevant budgetary cost and emphasize the challenge betwe en balancing the costs generated by the change of the formula and the objective of increasing the value of the pension point, while dealing with the sustainability of public finances.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Financial Studies ; ISSN: 2066-6071 ; Volume: 23 ; Year: 2019 ; Issue: 2 (84) ; Pages: 62-74 ; Bucharest: Romanian Academy, National Institute of Economic Research (INCE), "Victor Slăvescu" Centre for Financial and Monetary Research

Classification and Topics

• Classification: Wirtschaft ; Social Security and Public Pensions ; Demographic Trends, Macroeconomic Effects, and Forecasts ; Retirement; Retirement Policies
• Subject: public pensions ; inequity ; Romania

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dumitrescu, Bogdan ; Drăghia, Andreea Elena
• Event: Veröffentlichung
• (who): Romanian Academy, National Institute of Economic Research (INCE), "Victor Slăvescu" Centre for Financial and Monetary Research
• (where): Bucharest
• (when): 2019

Further information

• Handle: http://hdl.handle.net/10419/231677
• Last update: 10.03.2025, 11:42 AM CET