PNL and PSD, in a tug-of-war over pension increases. What the two parties are proposing

The PNL and PSD are at war with each other over pension increases, as they have been for the past two months, and over the energy price cap. This time, the bone of contention is the amount by which pensions are to be increased and a possible difference in treatment for small pensions.

First of all, it should be noted that the most populist approach prevailed, coming from the PNL. The PSD moved first and, through the voice of Minister Marius Budăi, announced in September that it wanted a 10% increase. In October, however, President Klaus Iohannis announced that he wanted an increase of at least 15%. Marcel Ciolacu was irritated by Iohannis’ demand and said he did not want to get into a „bidding war”.

In the end, according to G4Media sources, both parties agreed to a 15% increase in the pension budget. But this is where the differences come in.

The NLP wants a 15% increase in the pension point, which means a uniform 15% increase in all pensions in the contributory public system.

The PSD, on the other hand, wants a 15% increase in the pension budget, to be split as follows:

– a 10% increase in the pension point (which will mean a uniform 10% increase in all public pensions)
– the rest of the money to go in the form of bonuses to pensioners with pensions considered low (either under 2,500 lei or under 2,000 lei). The bonuses would be granted as last year

The solution proposed by the PSD respects the constitutional principle of non-discrimination in the increase of pensions, according to experts consulted by G4Media, since the pension point would be increased by the same percentage for all beneficiaries and the bonuses would be granted according to criteria decided by the government.

It should be noted that the general increase of the pension point (either by 10% – PSD version, or 15% – PNL version) would also benefit those who receive special pensions that have a component based on contributivity, such as the military.

The PSD and the PNL are negotiating a solution to the pension increase and a final decision is expected next week, following a coalition meeting.

Background. The PSD has consistently called for the removal of the 9.4% of GDP cap on pensions introduced by the PNRR, and Prime Minister Nicolae Ciucă said on 27 October, after several meetings in Brussels including with European Commission President Ursula von der Leyen, that he had discussed adjusting some milestones in the National Recovery and Resilience Plan (PNRR), as well as replacing the 9.4% of GDP cap on pensions.

However, the European Commission said on Friday, in a response to G4Media.ro, that the 9.4% of GDP cap on pensions is part of the public pension reform measure and that a goal of the new legislation agreed through the PNRR is „to keep total gross public pension expenditure (including all existing public pension schemes) stable in the long term (2022-2070) at 9.4% of GDP, including a brake mechanism in case the expenditure ceiling is exceeded”.

Translated article