Voluntary Pension Scheme

Voluntary participation

• Persons with taxable income, residing in Romania on the basis of an individual act of accession¹ (employees, civil servants, self-employed persons, appointed or elected individuals, members of cooperative companies and others that derive income-related earnings).
• Pension plan providers may not refuse the individual act of accession to any person possessing the right to participate in the scheme.

General finances

• Fully funded personal pension plans based on contribution payments and capital revenues.

Contribution payments

• Contribution payments are determined in accordance with the rules of the respective scheme (maximum amount of contribution payments: 15% of the monthly gross salary of the insured person).
• Persons are entitled to modify, suspend or cease their contributions at any time.
• Contributions can be paid by employer or shared between employee and employer (depending on scheme’s provisions and individual act of accession).

State support

• Contribution payments of up to EUR 200 per fiscal year can be deducted from the monthly personal income tax base.
• Contribution payments paid by employer per employee of up to EUR 200 per fiscal year are recognised as expense deductible from the tax base.

• Pension plan providers (pension companies, investment management companies, life insurance companies) manage pension funds and pay benefits directly to the eligible person.
• The ‘Supervisory Commission of the Private Pension System’ licenses, oversees and sanctions the pension plan providers.
• The ‘Private Pension Guarantee Fund’ compensates losses to persons and beneficiaries, both during the period of capital accumulation and after the pension entitlement, caused by the inability of managers or pension providers to meet their obligations; fund managers and private pension providers pay contribution² to the ‘Private Pension Guarantee Fund’.

• Minimum age is 60.
• A minimum of 90 paid monthly contributions and accumulation of sufficient capital is required for the payment of the minimum benefit as determined by the ‘Supervisory Commission’ of the
  private pension scheme.

Pension payments

• Accumulated capital through contribution payments and investment yields, minus adminis-
  tration costs/fees of pension plan provider.
• Monthly life-long annuity in case of sufficient accumulated capital; option for one-time lump sum payment in case of benefits below minimum threshold.

Taxation and social security contributions on pension payments

• 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.