Romanian pension system unsustainable

One out of four adults is retired in most of the counties in Romania, putting major stress on the Romanian pension system. The percentage of retired people is 30.51 percent in Hargita/Harghita County and 30.66 percent in Maros/Mureș County, among the adult population. Although the situation is not at all ideal even now, according to estimates, the ageing population will speed up even more in the next 50 years.

Out of the counties of the Transylvania-Partium- Banat region, Temes/Timiș County has the lowest percentage of retired people (26.48 percent). This also means that on a national level, it is the fifth hardest-working county.

But because of the expected life span and the ageing of the population, we can expect a significant shift in the elderly population. The number of the oldest in this group (above 80 years) will increase to a great extent. According to some estimates, by 2070, the number of those older than 80 will increase to 655,000 people; other measurements say this figure will reach 789,000 people. People who are over 65 are vulnerable because they have special needs compared to other groups of society. To maintain a standard of living for this elderly population, many economic, social and psychological aspects thus have to be met.

The estimates point to a possible major loss of demographic balance that cannot be ignored if Romania wants to prevent the negative consequences of such a situation. The effects on the labor market, pension system and medical and social services could wreak havoc on the government’s budget, as well as on the budgets of individual households.

Another issue is the many Romanians working abroad and paying their contributions to the country they are living in.

According to analysts, a solution to the problem could be raising the retirement age and remodeling the pension system, including investing pension money. But the government does not dare take such steps, as they would be very unpopular.

Related: Constitutional Court to decide on taxation of special pensions

Featured image: infostart.hu

Author: Blanka Székely