No salary in Romania will drop when the system of contributions is changed, on the contrary, the employee's net will increase and one will have a much higher amount in one's pension account, Labour Minister Lia-Olguta Vasilescu said, Sunday evening, at private TV broadcaster Antena 3.
"I can guarantee that no salary in Romania will decrease when we change the contributions' system. It is in the Governing Programme and whoever has read the Governing Programme saw some six months ago that this was going to happen. A palpable example: for a salary of 1,000 lei, there is a 26.3 pct contribution to the pension system, but 10,5 pct is currently the employee's contribution and 15,8 pct is paid by the employer. This 10.5 pct amount goes straight into the pension account, and the money given by the employer goes into the national basket. (...) What are we exactly doing now? For the same 1,000 lei salary, the pensions' contribution will be 25 pct, not 26,3 pct, but this contribution will go directly into the employee's account. This means a higher contribution, a higher pension for the employee. At present, the contributions are 39.25 pct, they will be lowered and will reach 35 pct, and the salary tax will drop too, from 16 pct to 10 pct, so that we cover this transfer of contributions from the employer to the employee and not reduce the employee's net," the Labour Minister explained.
Although the minimum wage currently paid is 1,450 lei, Vasilescu pointed out that the real minimum wage in Romania is 1,750 lei, derived after the 39.25 pct contributions to the state are paid.
"We have the 1,450 lei minimum wage currently paid, the employee actually receives 1,065 lei of this salary, after paying their share of contributions and the employer pays 1,750 lei. Practically, the real minimum wage in Romania is 1,750 lei because after these 39.25 pct contributions are paid to the state, it ensues that this is the minimum wage. What have we done? We have transferred these contributions to the employee, we reduced them, the result is that in your pension account there will be more money when you retire, and also, for the next few years, the minimum wage will continue to rise. (...) The Governing Programme says that the minimum wage increases by 100 lei each year, so next year it will be 1,550, in 2019, 1,650 lei, and in 2020 it will be 1,750 lei, but in real terms, the minimum wage will actually be 1,850 lei next year, 1,950 in 2019 and 2,050 lei in 2020," Mrs. Lia-Olguta Vasilescu further said.
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