Military Pension Scheme
Sistemul de pensii militare
Coverage
Mandatory insurance
- Military personnel, police officers and civil servants with special status.
Financing
General finances
- Partially PAYG-financed from insurance contributions of the currently insured persons.
- Partially financed by the general budget.
Contribution rates
- Fixed share of monthly gross earnings (25%) with contribution assessment limit.
- Contributions are entirely covered by the employee.
Taxation of contribution payments
- Contributions are not subject to taxation.
Administration
- The Sectorial Houses of Pensions manage the scheme and pay benefits directly to the eligible person.
- The Ministry of National Defence, the Ministry of Internal Affairs and the Romanian Intelligence Service ensure the application of the relevant regulations and exercise control over their application.
- Contributions are paid into the general budget; the payment of benefits is provided from the general budget through the budgets of the responsible institutions (Ministry of National Defence, Ministry of Internal Affairs, Romanian Intelligence Service).
Qualifying Conditions
Qualifying conditions
- Standard old age pension: statutory retirement age is 60; minimum insurance period: 25 years of effective service1 (incl. at least 15 years of actual service).
- For persons working in burdensome conditions: one year’s insurance period of actual service can be equal to either: 1 year and 3 months (in the case of difficult working conditions), 1 year and 6 months (in the case of special working conditions), or 2 years (in the case of other specific burdensome conditions).
Early retirement
- Available up to 5 years before the statutory retirement age, with minimum insurance period: 25 years of effective service (at least 15 years of actual service) if the following conditions are fulfilled: (a) retirement/ceasing of service as a result of the reorganisation of establishments and the reduction of some functions, as well as for other reasons of institutions in the field of national defence, security and public order; (b) retirement/ceasing of service as a result of (limited) work disability for military service recognised by the medical-military expertise committees (at the date of fulfilling the standard old age pension conditions, the early retirement pension is converted to old-age pension and recalculated).
- No requirement for retirement age; minimum insurance periods: 20 years of effective service (at least 10 years of actual service) if the following conditions are fulfilled: (a) retirement/ceasing of service as a result of the reorganisation of establishments and the reduction of some functions, as well as for other reasons of institutions in the field of national defence, security and public order; (b) retirement/ceasing of service as a result of (limited) work disability for military service recognised by the medical-military expertise committees.
- Work in burdensome conditions: special early retirement regulations apply; pensions can be claimed up to 13 years (maximum) before the statutory retirement age (lowest possible retirement age is 45 years).
Deferred retirement
- Retirement can be deferred with positive (permanent) adjustments to pension benefits (1% of the calculation base per year).
Combining employment & retirement
- Termination of employment is not a precondition for claiming pension benefits.
- After reaching the statutory retirement age employment is permitted without earnings limit.
Benefits
Pension benefits
- Primarily based on last earnings prior to retirement and years of service.
- Maximum amount: 85% of the calculation base, including recalculated and indexed benefits.
- No specification in law regarding fixed minimum amount of pension benefits.
- Partial early retirement benefit: primarily based on the number of years of service.
Factors for benefit calculation
- Calculation base: the average gross monthly salary for the basic function in 6 consecutive months, of the last 5 years of activity (as chosen by the participant).
- Persons with a cumulated seniority in service of at least 25 years: a service pension amounting to 65% of the calculation base; in addition, for each year that exceeds this seniority, 1% of the calculation base is added to the amount of the pension.
- Adjustments: the amount of the benefit paid on 31 December of the previous year is indexed, ex officio, starting with 1 January of the current year, with the last average annual inflation rate.
Taxation and social security contributions
- Taxable pension income is subject to 10% income tax (the taxable pension income is determined by deducting the monthly non-taxable amount of RON 2,000 from the pension income).
- Pension benefits are not subject to social security contributions.
Coverage
Financing
Administration
Qualifying Conditions
Benefits
Mandatory insurance
- Military personnel, police officers and civil servants with special status.
General finances
- Partially PAYG-financed from insurance contributions of the currently insured persons.
- Partially financed by the general budget.
Contribution rates
- Fixed share of monthly gross earnings (25%) with contribution assessment limit.
- Contributions are entirely covered by the employee.
Taxation of contribution payments
- Contributions are not subject to taxation.
- The Sectorial Houses of Pensions manage the scheme and pay benefits directly to the eligible person.
- The Ministry of National Defence, the Ministry of Internal Affairs and the Romanian Intelligence Service ensure the application of the relevant regulations and exercise control over their application.
- Contributions are paid into the general budget; the payment of benefits is provided from the general budget through the budgets of the responsible institutions (Ministry of National Defence, Ministry of Internal Affairs, Romanian Intelligence Service).
Qualifying conditions
- Standard old age pension: statutory retirement age is 60; minimum insurance period: 25 years of effective service1 (incl. at least 15 years of actual service).
- For persons working in burdensome conditions: one year’s insurance period of actual service can be equal to either: 1 year and 3 months (in the case of difficult working conditions), 1 year and 6 months (in the case of special working conditions), or 2 years (in the case of other specific burdensome conditions).
Early retirement
- Available up to 5 years before the statutory retirement age, with minimum insurance period: 25 years of effective service (at least 15 years of actual service) if the following conditions are fulfilled: (a) retirement/ceasing of service as a result of the reorganisation of establishments and the reduction of some functions, as well as for other reasons of institutions in the field of national defence, security and public order; (b) retirement/ceasing of service as a result of (limited) work disability for military service recognised by the medical-military expertise committees (at the date of fulfilling the standard old age pension conditions, the early retirement pension is converted to old-age pension and recalculated).
- No requirement for retirement age; minimum insurance periods: 20 years of effective service (at least 10 years of actual service) if the following conditions are fulfilled: (a) retirement/ceasing of service as a result of the reorganisation of establishments and the reduction of some functions, as well as for other reasons of institutions in the field of national defence, security and public order; (b) retirement/ceasing of service as a result of (limited) work disability for military service recognised by the medical-military expertise committees.
- Work in burdensome conditions: special early retirement regulations apply; pensions can be claimed up to 13 years (maximum) before the statutory retirement age (lowest possible retirement age is 45 years).
Deferred retirement
- Retirement can be deferred with positive (permanent) adjustments to pension benefits (1% of the calculation base per year).
Combining employment & retirement
- Termination of employment is not a precondition for claiming pension benefits.
- After reaching the statutory retirement age employment is permitted without earnings limit.
Pension benefits
- Primarily based on last earnings prior to retirement and years of service.
- Maximum amount: 85% of the calculation base, including recalculated and indexed benefits.
- No specification in law regarding fixed minimum amount of pension benefits.
- Partial early retirement benefit: primarily based on the number of years of service.
Factors for benefit calculation
- Calculation base: the average gross monthly salary for the basic function in 6 consecutive months, of the last 5 years of activity (as chosen by the participant).
- Persons with a cumulated seniority in service of at least 25 years: a service pension amounting to 65% of the calculation base; in addition, for each year that exceeds this seniority, 1% of the calculation base is added to the amount of the pension.
- Adjustments: the amount of the benefit paid on 31 December of the previous year is indexed, ex officio, starting with 1 January of the current year, with the last average annual inflation rate.
Taxation and social security contributions
- Taxable pension income is subject to 10% income tax (the taxable pension income is determined by deducting the monthly non-taxable amount of RON 2,000 from the pension income).
- Pension benefits are not subject to social security contributions.
1 Effective service: periods of time recognised as actual service, contribution periods or similar pension-relevant periods, not including additional periods granted for work performed in special or difficult working conditions.
Legal Basis: Law No. 223/2015 regarding military pension (Legea nr. 223/2015 privind pensiile militare); Law No. 227/2015 regarding the Fiscal Code (Legea nr. 227/2015 privind Codul fiscal).