Cartel Alfa leader: 65 pct of employees to collect minimum retirement benefit under new pension bill

According to the new pension bill, about 65 percent of the employees will only collect the minimum pension, president of the 'Cartel Alfa' National Trade Union Confederation Bogdan Hossu told a press conference in Zalau on Wednesday.

According to the union leader, there are at least two major issues with the bill, let aside fears that the law's enforcement is not actually desired.

The first issue Hossu points at is a so-called penalization of the employee, given that the bill provides that if the employer defaults for a certain period on paying the pension contribution, the respective period will not be considered in the calculation of the employee's retirement benefit.

The other identified issue has to do with the new concept of minimum pension which, the way it is defined in the new piece of legislation, is a work demotivator for the majority of employees, and at the same time encourages the employer to evade tax, said the union leader.

"Basically, according to the draft law, a minimum contribution length of 15 years corresponds with the minimum pension of 45 percent of the national minimum wage. For each extra year worked, one can reach to 75 percent of the minimum wage. This means that an employee with an average length of service of 30 years collects a minimum pension of 60 percent of the minimum wage. (...) It follows that one needs a wage of at least 4,600 lei after a length of service of 30 years in order to collect the minimum pension. So one qualifies for a pension above the minimum only provided that his or her salary was of over 4,600 lei. If we correlate these figures with the salary distribution revealed by the REVISAL Employees Register, or as in the current payroll record software of the Labor Inspectorate, we see that some 65 percent of the employees will only collect the minimum pension. So, whether one's salary is 2,000 or 4,600 lei, according to the draft piece of legislation one will get the same pension - 60 percent of the minimum wage," said Bogdan Hossu.

The union leader said that the confederation's proposal is that either a minimum pension be recalculated according to the minimum length of service, or that a welfare amount is established as starting point, to which the pension calculated with the formula provided by the law is added, thus allowing an active person who has duly completed the service length to collect a higher pension than someone who did not work and only lives off the welfare benefit.

Hossu also pointed to the envisaged more than double increase of the current pension fund, terming it as a populist tool and not an effective solution to a major problem.

He added that all representative trade union confederations addressed an open letter to the Prime Minister, in her capacity as chair of the Tripartite National Council for Social Dialogue, to call a meeting of this body to discuss the issues of the new pension bill. AGERPRES (RO - author: Sebastian Olaru, editor: Nona Jalba; EN - author: Simona Klodnischi, editor: Simona Iacob)