A new indexation of pensions this year will not take place as the state must ensure the sustainability of the pension system, said Minister of Labor and Social Protection Alexei Buzu. According to the minister, a new indexation of pensions would mean an irresponsible action when the deficit of the social insurance budget is of 30%, IPN reports.
Under the law on the public pension system, the indexation takes place on April 1 based on the rate of inflation at the end of the previous year. However, by derogation from the law, this year the pensions were indexed by only 15%, even if the rate of inflation was higher. Minister Alexei Buzu said the social insurance budget is in deficit and a new indexation of pensions is not possible therefore.
“Ensuring decent living for pensioners is the Government’s reasonability and we realize that we have yet a lot to do in this regard. But we also need to ensure the sustainability of the pension system. The number of pensioners and the number of persons who work is almost equal. We have a very big problem related to social solidarity, which is the large number of persons who get salaries illegally. Now we are trying to make sure that all the persons who can work do work, while the working persons contribute adequately, including to the social insurance budget, as this is the only method by which we can ensure decent pensions. We do not want to take irresponsible fiscal measures and to generate a bigger problem. The deficit of the social insurance budget is of 30%. This deficit is covered with state budget funds,” Alexei Buzu stated in the program “Résumé” on RliveTV channel.
According to the minister, even if the pensions in April weren’t indexed according to the rate of inflation, the previous raises in pensions enabled the older pensions to keep the purchasing power.
“We must make sure that the pension system is sustainable in two years and in ten years too. The increasing of pensions is a priority for us. The minimum pensions since 2021 until present has grown by 120%. The average pension increased by 72%. So, both of the pensions rose above the cumulative inflation. We will make effort to identify the necessary resources so as to strengthen the pension system. According to our forecasts, the budget for pensions will be balanced only in 2040-2045,” explained Alexei Buzu.
This year, the cost of indexation of pensions and other social benefits with the indexation coefficient of 15% is of over 3 billion lei.
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