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

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

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

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

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

7. PENSION SYSTEM Main sub-components Pillar 1 Pillar 2 Pillar 3 Pillar 1 Pillar 2 Pillar 3 7 Private administration MandatoryContributoryFully-fundedDC Individual accounts Public administration MandatoryContributoryPay-as-you-goDBRedistributive Private administration VoluntaryContributoryFully-fundedDC Individual accounts

8. PENSION SYSTEM 8 Pillar 1 - 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 - 5.2 million retirees - 1.08 dependency rate

9. PENSION SYSTEM 9 Pillar 1 - 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 10 Pillar 1 - 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 11 Pillar 2 – 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%) -Currently 4.5 % subtracted from the employee pension contribution - 8 pension funds - 6.2 million participants

12. Pillar 2 – 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 PENSION SYSTEM

13. Net assets and participants in Pillar 2

14. PENSION SYSTEM 14 Pillar 3 – Voluntary private pension system -Law No. -Law No. 204/2006 starting of recruitment and collection -June 2007 – starting of recruitment and collection -Contribution rate maximum 400 Euro/employee/year deducted in calculating income tax/corporate tax) -Maximum 15% (maximum 400 Euro/employee/year deducted in calculating income tax/corporate tax) -10 pension funds -0.3 million participants -Financial Supervisory Authority – supervision function

15. PENSION SYSTEM Net assets and participants in Pillar 3

16. UNEMPLOYMENT INSURANCE SYSTEM 16 - 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 17 - 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 DISEASES SYSTEM - 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 18

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/or the 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 19

20. - 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 20 SOCIAL ASSISTANCE SYSTEM

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

22. Thank you doina.parcalabu@cdep.ro 22