New public sector pay law adopted – impact on pensions and services for seniors

Romania's main political parties — PSD, PNL, USR and UDMR — have recently signed a cooperation agreement for the adoption of a new public sector pay law, a move that could have significant implications for the pension system and social services for older people.

The political agreement was finalised following a mediation process coordinated by the Presidential Administration and provides for the implementation of the new legislative framework before the end of the current parliamentary session. The initiative comes in the context of the need to reform the pay system in the state-funded sector.

The new legislation introduces two reference values that will serve as the basis for calculating public sector salaries — a change that could indirectly affect the way pensions are calculated, given the link between contributory records and income levels in the public sector.

For Romania's senior citizens, this reform could have consequences for the quality of public services they rely on, including in the areas of healthcare, social assistance and local care provision. Changes to pay in the state-funded sector may affect the motivation of staff working in social and medical services for older people.

Public policy experts warn that any reform of the pay system must take into account its impact on pension recipients and on the long-term sustainability of the social security system.