The newly elected Romanian government's draft budget for 2013 has retained a planned second-pillar contribution rise, from 3.5 per cent to 4 per cent of gross wages.
The government intends to raise budget revenues by levying a tax of up to 60 per cent on profits resulting from last year's gas market deregulation, in addition to other energy and natural resource taxes. The IMF and the EU approved the draft budget. Romania received a €20 billion bailout from the IMF, EU and World Bank in early 2009, followed by a €5 billion IMF standby agreement two years later.
The original pension legislation expected the contributions level to reach 6 per cent by 2016. Contributions were frozen at 2 per cent in 2009 following the financial crisis, but subsequently increased by 0.5 per cent a year. The initial low level and gradual phasing made the second pillar less of a burden on the state system, and less of a target after the financial crisis inflated public deficits across Europe, than in countries such as Poland and Slovakia with initially high rates.
Full article (IPE registration required)
© IPE International Publishers Ltd.
Key
Hover over the blue highlighted
text to view the acronym meaning
Hover
over these icons for more information
Comments:
No Comments for this Article