Lawyers’ Pension Scheme

Mandatory insurance

• Lawyers registered with a Bar (all Romanian and foreign lawyers registered in the Lawyer’s Registry and having the right to practise their profession, incl. retired lawyers who continue to exercise their profession).

General finances

• PAYG-financed insurance contributions, capital revenues, donations, grants and other income provided for by law.

Contribution rates

• Fixed share of monthly gross earnings (11%) paid by the insured person with contribution assessment ceiling.
• Minimum mandatory contribution rate: RON 300 (RON 312 in 2021) on the basis of a gross income of a maximum of RON 2,723 (RON 2,836 in 2021); for trainee lawyers: RON 80 for a gross income of a maximum of RON 2,723.
• Maximum mandatory contribution rate: RON 1,452 (RON 1,562 in 2021) on the basis of a gross income of RON 13,200 (RON 14,200 in 2021).

Taxation of contribution payments

• Contributions are not subject to taxation.

• The Lawyers' Insurance House and its subsidiaries manage the scheme and pay benefits directly to the eligible person.

Qualifying conditions

• Standard old age pension: statutory retirement age is 65; minimum insurance period: 15 years (full pension insurance period: 35 years).
• Individuals who have completed the full pension insurance period and have raised at least one child up to the age of 10: reduction of the statutory retirement age by 6 months (one child), one year (2 children), 18 months (3 children), 2 years (4 or more children); no negative adjustment to pension benefits.

Early retirement

• Available up to 5 years before the statutory retirement age; with a minimum insurance period as a lawyer of at least 5 years more than required for the full pension insurance period of the standard old age pension; no negative adjustment to pension benefits.
• At the date of fulfilling the standard old age pension conditions, upon request; the early retirement pension can be recalculated and converted into a permanent retirement pension; the early retirement pension can be received until age 70 when it is ex officio converted into a permanent retirement pension; no negative adjustment to pension benefits. 

Deferred retirement

• Retirement can be deferred until the individual requests permanent retirement;¹ positive (permanent) adjustments to pension benefits calculated by taking into account the additional average annual score for the contribution periods after the standard retirement age (or date of standard old age pension entitlement) up until the date of the permanent retirement entitlement;² after requesting permanent retirement pension, the person may no longer return to the profession.

Combining employment & retirement

• Termination of employment is not a precondition for claiming pension benefits.
• After reaching statutory retirement age employment is permitted without earnings limit.
• Persons (who have not requested permanent retirement) may continue to practice as lawyers by providing contribution payments to the scheme with positive (permanent) adjustments to the permanent pension benefit: score increases by 0.3% for each month and 3.6% for each additional year added to the contribution period.

Pension benefits

• Dependent on total amount of individual contribution payments and contribution period.
• No specification in law regarding fixed minimum and maximum amount of pension benefits.
• Pension benefits can be combined with benefits of the statutory old age pension scheme and act as a supplement (if insured person chose to be insured in both schemes).

Factors for benefit calculation

• Based on the following factors: the monthly score, the reference income, the annual score, the average annual score and the pension points.
• Monthly score: determined by dividing the individual gross monthly income by the reference income  
• The reference income:  the average gross income for the legal profession, established annually by the Bar’s decision, is used to calculate all social insurance benefits and other social insurance rights of lawyers (RON 2,428). 
• Annual score: determined by dividing the sum of the monthly scores achieved in the given calendar year by 12.
• Average annual score: determined by dividing the number of points resulting from the sum of the annual scores by the number of years corresponding to the full pension insurance period.
• Pension point: starting 01/09/2020, the amount of one pension point is RON 1,388 (in 2021).
• The amount of the benefit equals the sum of the multiplication of the pension point in the month of retirement and the average annual score.
• Adjustments: annual adjustment of the pension value taking into account inflation coefficient and financial situation of the scheme.

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.