Overtime and increments will be taken into account when determining the pension

Pensions will be recalculated because a new law states that overtime and increments will be taken into account when determining the pension.

The new Law on the public pension system that will apply from September 1 provides, in addition to the rule that the legal retirement age will be the same for men and women, respectively 65 years, and that overtime, premiums in money and that of 13th salary will be taken into account when determining the pension.

According to the new law, the pension will be calculated by multiplying the reference point, in the amount of 81 lei, by the total number of points achieved by the employee. This means that all contribution rates paid to the social security budget are quantified, plus increments and overtime, if applicable.

The 13th salary will also be taken into account for calculating pensions. But the authorities must also set up the computer system for the recalculation of all pensions. So far, 95% of the files of the nearly 5,000,000 pensioners have been entered into the electronic system.

“The legislator said very clearly to take advantage of the increments granted sporadically throughout the activity, that is, we are talking about those increments that did not have a permanent character – I am referring to the global agreement, which was a form of remuneration before 1989, I am referring to bonuses and prizes that were awarded either at the end of the year, now they are not taken into account, but we considered that they should be taken into account in the calculation of the pension”said Daniel Baciu, president of the Pension House, according to stirileprotv.ro.

“Within 6 months from the entry into force of this law, the pensions provided for in art. 144 para. (1) is recalculated ex officio, by capitalizing on certificates that meet the conditions of validity and legality, provided for in art. 4 para. (1) and art. 5 para. (1) from the Order of the Minister of Labor and Social Protection no. 487/2021 regarding the performance of evaluation operations of public system pensions established until September 1, 2023, non-permanent increases/incomes or monthly, gross or net incomes, as the case may be, made before April 1, 2001, paid from the fund of wages, on which, according to the law, the state social insurance contribution was due, not capitalized in the calculation of the pension rights due or in payment”, it is shown in Law 360/2023.

Certificates from employers

Currently, the authorities at the Pension Fund know the gross incomes of all employees since April 2001. That is, all the basic salaries, bonuses and premiums that employers are obliged to send monthly to ANAF.

For the increments collected before 2001, the people can bring from the employers, where each one carried out his activity to ask for a certificate that is very clearly stipulated in the law, the experts also say. In exceptional situations, in which the work card has been lost or the employer no longer exists, the law provides that the data will be taken from the electronic archive of the pension houses.

Moreover, according to the law, extra points will be awarded for people who exceed 25 years of contribution: 0.50 points for each year achieved over 25 years, 0.75 points for each year over 30 years and a point for each year over 35 years. For example, a pensioner who worked for 37 years and 7 months in the textile industry will receive 8.8 points for 12 years of work over the contribution period. The number of points would bring him a higher pension from September. According to the calculations, from a pension of 2,569 lei, which he has now, he would receive around 3,800 lei from September 1.

The recalculation scheduled for September would have an impact of approximately 10 billion lei, according to officials from the Ministry of Labor.

Having children brings you to retirement sooner

It should be noted that the new law also provides that women who have completed the full contribution period (35 years) and who have given birth and raised children will benefit from the reduction of the retirement age by periods ranging from six months to three and a half years, depending of the number of children. Thus, the smallest period of retirement age reduction, of six months, will apply to women who have raised a child, and the longest, of three and a half years, to women who have given birth and raised at least seven children.