THE ROMANIAN SOCIAL SECURITY SYSTEM IN THE GLOBAL CONTEXT Doina Domnica Pârcălabu

1. GLOBAL ECONOMY & GOVERNANCE GEG 2014 International Conference THE ROMANIAN SOCIAL SECURITY SYSTEM IN THE GLOBAL CONTEXT Doina Domnica Pârcălabu General Director Chamber of Deputies

2. CONTENTS Social security system Social insurance system Pension system Unemployment insurance system Health insurance system Accidents at work and occupationaldiseasessystem Social assistance system Globalization in social security

3. SOCIAL SECURITY SYSTEM • Key features - National safety net - Instrument for economic growth - First place in the budgetary framework - Exposed to escalating restraints - By large, provider of old-age benefits and contributory benefits - Subject to on-going reform processes correlated to European and World Bank practices

4. SOCIAL SECURITY SYSTEM Main components SOCIAL ASSISTANCE SYSTEM SOCIAL INSURANCE SYSTEM

5. SOCIAL INSURANCE SYSTEM Key features - Long tradition (1868 pensions for state officials) - Contributiveness - Intra and inter-generational solidarity - Both public and private social insurance systems

6. SOCIAL INSURANCE SYSTEM Main components PENSION SYSTEM UNEMPLOYMENT INSURANCE SYSTEM HEALTH INSURANCE SYSTEM ACCIDENTS AT WORK AND OCCUPATIONAL DISEASES

7. PENSION SYSTEM Main sub-components Pillar1 Pillar2 Pillar3 Public administration Mandatory Contributory Pay-as-you-go DB Redistributive Private administration Mandatory Contributory Fully-funded DC Individual accounts Private administration Voluntary Contributory Fully-funded DC Individual accounts

8. PENSION SYSTEM Pillar1 - Public pension system - Implementation of the reform –2001/2010 - Law No.19/2000/Law No. 263/2010 - Contribution rates • Employer: 20.8/25.8/30.8 according to working conditions • Employee: 10.5 - 5.6 million insured persons - 5.2millionretirees - 1.08 dependency rate

9. PENSION SYSTEM Pillar1 - Public pension system (contd.) -Pension formula based on points - Old-age, invalidity, survivors pensions - Integration of special pension schemes in Pillar 1 i.e. military, police, parliamentarians etc. - Recalculation of special pensions

10. PENSION SYSTEM Pillar1 - Public pension system (contd.) - Social Insurance Budget - National House of Public Pensions – record-keeping, budget execution, calculation and payment of benefits functions - National Agency for Fiscal Administration – collection function (2004, WB approach)

11. PENSION SYSTEM Pillar2 – Mandatory private pension system - Law No. 411/2004 - September 2007 – starting of recruitment period • Mandatory: below 35 years of age • Voluntary: below 45 year of age - May 2008 – starting of collection - Contribution rate (from 0.5% up to 6%) • Currently4.5 % subtracted from the employee pension contribution - 8 pension funds - 6.2million participants

12. PENSION SYSTEM Pillar2 – Mandatory private pension system (contd.) • Financial Supervisory Authority – supervision function • National House of Public Pensions – record-keeping function • National Agency for Fiscal Administration – collection function

13. PENSION SYSTEM • Net assets and participants in Pillar 2

14. PENSION SYSTEM Pillar3 – Voluntary private pension system • Law No. 204/2006 • June 2007 –starting of recruitment and collection • Contribution rate • Maximum 15% (maximum 400 Euro/employee/yeardeducted in calculating income tax/corporate tax) • 10pension funds • 0.3 million participants • Financial Supervisory Authority – supervision function

15. PENSION SYSTEM • Net assets and participants in Pillar 3

16. UNEMPLOYMENT INSURANCE SYSTEM -Law No. 76/2002 - Contribution rates • Employer: 0.5% • Employee: 0.5% - Active and passive measures - Unemployment Insurance Budget - National Agency for Labor Force Employment

17. HEALTH INSURANCE SYSTEM - Law No. 95/2006 - E.O.No. 158/2005 - Contribution rates • Employer: 5.2% + 0.85% • Employee:5.5% - Basic health care packet and sickness benefits - Unique National Health Care Insurance Fund - National House of Health Insurance

18. ACCIDENTS AT WORK AND OCCUPATIONAL DISEASESSYSTEM - Law No. 346/2002 - Law No. 263/2010 - Contribution rates • Employer: between 0.15% and 0.85% according to risks classes - Medical rehabilitation and vocational rehabilitation, invalidity and survivors pensions - Part of the Social Insurance Budget - National House of Public Pensions – tripartite board

19. SOCIAL ASSISTANCE SYSTEM - Law No. 292/2011 and other specific regulations - Non-contributory - State Budget and/or local budgets - State Inspectorate in the Social Assistance Field and/orthe institutions at the local level of authority - Major family benefits - State Allowance for Children - Family Support Allowance - Child-Raising Indemnity/Bonus for Insertion - Placement Allowance

20. SOCIAL ASSISTANCE SYSTEM - Major guaranteed minimum resources benefits • Social Aid • Heating Energy Allowance • Natural Gas Allowance • Solid Fuel or Oil Allowance - Major disability benefits - Indemnity - Complementary Personal Budget - State allowance for Children with handicap - Personal Assistant/Qualified - Day centers - Residential centers

21. GLOBALIZATION IN SOCIAL SECURITY • No global system of social security Divergent national interests • European Union solution Open method of coordination • Globalization of social difficulties needs globalization of social policies

22. Thank you doina.parcalabu@cdep.ro