The Pension and Disability Insurance Fund (PIO) has assured that the recently proposed Fiscal Strategy will not adversely affect its operations. The Fund confirmed that pensions will continue to be paid and adjusted according to the usual schedule.
Representatives from the PIO told RTCG that they expect adjustments to proportional pensions. The Fiscal Strategy for the period up to 2027 outlines that the Fund will continue its operations as usual, ensuring that it has the financial resources needed for regular pension payments, as guaranteed by the state.
The Fiscal Strategy proposes reducing the pension contribution rate for employees from 15% to 10% and eliminating the 5.5% employer contribution rate. This change will significantly impact the Fund’s revenue, reducing the total contribution rate from 20.5% to 10%, which represents a 50% decrease.
To mitigate the revenue shortfall caused by the reduced contributions, the Fund will cover some pension obligations from general budget revenues. Pension calculations for current and future retirees will remain unchanged, as the calculation basis will not be altered.
The timing of pension payments will remain consistent, with payments made on the 20th of each month for the previous month. Pension adjustments will continue to follow the current method, which is based on average earnings and consumer price changes, in accordance with the Pension and Disability Insurance Law.
The PIO also initiated a proposal last February to amend the Pension Law for proportional pension recipients. The proposed change aims to ensure that payments do not exceed 450 EUR if their total income from the PIO Fund and other countries’ funds remains within this limit.
It is expected that this proposal will lead to the necessary legal adjustments for this group of recipients.
Regarding the anticipated pension increase in January, it is projected that pensions will rise by 7-8% next year, or by an average of 50 EUR.
The Fiscal Strategy document, which is used to prepare next year’s budget, indicates that the Fund will plan its expenditures based on fiscal policy guidelines and macroeconomic indicators to ensure that pensions are paid as projected.
The strategy also forecasts a reduction in the state budget of 180 to 200 million EUR due to lower pension contributions. The government plans to compensate for this shortfall through increased gross calculation bases, reduced informal economy impacts due to lower tax burdens on employers, and higher employment and wages.
The PIO emphasized that future pensions will not decrease as a result of reduced contributions, as the gross salary used for pension calculations will remain unchanged. The Pension Law stipulates that pensions are determined primarily by the length of service and the amount of gross salary.
