Ministry of Labor: Contribution for Pillar II of pensions will increase from 3.75% to 4.75%

Contributions to private pension funds (Pillar II) will increase from 3.75% to 4.75%, after the Government approved on Wednesday an Emergency Ordinance in this sense, the Ministry of Labor announced in a press release sent to AGERPRES.

"Milestone ticked in the National Recovery and Resilience Plan: contributions to private pension funds will increase from 3.75% to 4.75%. The Government approved in today's meeting an Emergency Ordinance which provides for an increase by one percentage point, starting January 1, 2024, in contributions to private pension funds (Pillar II). The measure is included in the National Recovery and Resilience Plan (PNRR), which also provides as a deadline for adoption, the date of March 31, 2022. The reform of the system proposed in the National Recovery and Resilience Plan aims to develop legislation for ensuring the medium and long term sustainability and predictability of the public pension system, respectively the sustainability of the Second Pillar of pensions, established by PNRR (component C8, R6, milestone 213), the contributions to the Pillar II of pensions being in line with the provisions of the budget fiscal strategy," the relevant ministry states.

According to the quoted source, the contribution to privately managed pension funds is part of the social insurance contribution due to the public pension system and is deducted from the gross monthly income which is the basis for calculating the social insurance contribution.

The calculation basis, the withholding and the payment terms of the contribution to the pension fund are the same as those established for the social insurance contribution.