An article declared unconstitutional by the CCR, in the Law regulating how private pension beneficiaries will be able to withdraw their money, will take the project back to Parliament to be corrected. The former president of the Constitutional Court, Augustin Zegrean, says that the initiative’s only chance is to reformulate or abandon this article.
PHOTO Inquam / Octav Ganea
The initiative regulating the withdrawal of money accumulated in private pension funds failed the constitutionality test, the CCR judges considering that an article violates the Constitution, “instituting discrimination” in the context of the exception for oncology patients, the only ones who, according to the project, could withdraw their sums in full.
“It goes back to the Parliament, in its entirety. Parliamentarians are obliged to agree with the Constitutional decision. They must find a solution in which the claims of the Constitutional Court are also satisfied and send the law again for promulgation. (…) As a rule, I can tell you from experience, when we declare a text unconstitutional, the Parliament stopped caring, got tired of agreeing to the decision and gave it up. Or give up the whole law, if the whole law was affected. If not, give up the text respectively. So the text that was declared unconstitutional will no longer be there.” explains the former CCR president.
“They’re going to sue the pension fund”
The discussions regarding the project initiated by the Government and drafted by the ASF focused, from the beginning, on how the withdrawal of money is regulated after 17 years from the initial term. In the public space, the major change that no longer allows beneficiaries to fully withdraw their accumulated sums drew attention, which generated questions related to the constitutionality of the provision and the possible negative consequences.
The Court’s argument showing that “the principle of non-retroactivity is not disregarded”because “does not affect the validity of previous contracts, but regulates a later stage, namely the payment of the pension” it is “questionable”, points out the former president of the CCR.
At the time of signing the contracts, the beneficiaries were assured that they would be able to withdraw the accumulated sums in full, which now raises the risk of lawsuits against the administrators of private pension funds. “People will go to court to get their money back. They will sue the pension fund“, warns the former president of the CCR.
For a reformulation or a decision regarding the removal of the article, however, the parliamentarians must wait for the reasoning of the CCR, which will indicate exactly the reasons for admitting the notification of unconstitutionality.
What the project provides
According to the law, beneficiaries of private pensions can collect a maximum of 30% of the money accumulated in pillar II in a single installment, and the rest in monthly payments for eight years. A major exception concerns oncology patients, who can withdraw the money in full.
In a press release, CCR shows that “the principle of non-retroactivity is not disregarded”because “does not affect the validity of previous contracts, but regulates a later stage, namely the payment of the pension”. However, the exception that allows cancer patients to withdraw all the money in one installment “violates the principle of equal rights”, establishing a discrimination “which is not based onare objective criteria, but, on the contrary, on the subjective criterion of the condition suffered by the member contributing to a pension fund”.
The provision is in article 55, paragraph 2, being introduced in the Senate, the first chamber referred, by PNL senators Nicoleta Pauliuc and Gabriela Horga: “(1) The member of a payment fund can receive a maximum of 30% of the value of his personal asset transferred to the payment fund, upon request, only once, in the form of a single payment granted before the start of monthly pension payments.
(2) By way of exception from para. (1), the patient with oncological diseases under the conditions provided by Law no. 293/2022 for the prevention and fight against cancer, with subsequent amendments and additions, may receive, upon request, 100% of the value of his personal asset in the form of a single payment”, shows the form of the project adopted by the Parliament.
What the initiators say
“Article 55, paragraph (2) was the most debated within the Senate committees. I initiated this amendment, together with Mrs. Pauliuc, starting from a reality – the low life expectancy of cancer patients. No one wanted there to be any form of positive discrimination, just as no one wants to be in the situation of a cancer patient”. STRESSES Gabriela Horga, one of the initiators of the amendment, for “Adevărul”.
The senator explains in the context of the CCR decision that a similar provision is already in the Fiscal Code, and the formulated amendment also complies with OECD requirements. “The PNL also introduced provisions in the Fiscal Code, which are in force, for cancer patients – namely the tax exemption for allowances for the care of cancer patients or the CASS exemption for cancer patients, and the measure was not considered discriminatory, but fair, knowing the drama that cancer patients and their families experience.
We developed the amendment also taking into account the OECD recommendations, the organization allowing the exception to the general rule, only for exceptional cases, regarding the full payment of the amounts. The OECD condition is simple – the exception should not become the rule”.
“We will consult with specialists in constitutional law, but also with representatives of the medical sector, in order to identify the best solution” – Gabriela Horga, co-initiator of the amendment
Initially, the amendment should have included patients with a life expectancy of less than one year, but the law would have risked being more unclear. “The original amendment proposed by myself and Mrs. Pauliuc included, in addition to cancer patients, also patients with a life expectancy of less than 12 months. A similar variant exists in the United Kingdom of Great Britain. Unfortunately, health policy specialists told us that they could not precisely define the terminally ill patient. Other fellow senators proposed variants such as “patient with comorbidities” or that included a large spectrum of diseases, which made that the exception becomes the rule. Thus, it was abandoned to define other categories of patients with low life expectancy and only oncological patients remained in the text of the law”.
The decisions of the CCR are final and generally binding, so the parliamentarians will resume the project. “We are waiting for the reasoning of the CCR, in order to start correcting the Law in Parliament. Given that only art. 55 paragraph (2) was declared unconstitutional, we will consult with specialists in constitutional law, but also with representatives of the medical sector, in order to identify the best solution”, explains senator Gabriela Horga, explaining that the law will be resumed in the emergency procedure.
