EUROPEAN JOURNAL OF ACCOUNTING, FINANCE & BUSINESS

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ISSN: 2344 - 102X

ISSN-L: 2344 - 102X



 

Article from Volume 4, Number 2, Year 2016

ASPECTS RELATED TO THE BALANCE OF THE PUBLIC PENSION FUND IN ROMANIA
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Author(s): Gheorghe Morosan
DOI: 10.4316/EJAFB.2016.425
Abstract: The issue of pensions and social security system is particularly important in Romania and in the European Union. The incoherent politics conducted over time by the governing political parties made the balance of the pension funds that cover an important category of the population - the elderly, even more fragile. A series of factors not necessarily related to social policies conducted by countries have a strong impact on the sustainability of the pension system. We hereby refer to the demographic factors, the dependency ratio, the unemployment rate and the average guaranteed net salaries. Among the incoherent policies conducted by the state we mention the change of the retirement age, the disrespect of the principle of contribution and the existence of special pensions, the faulty indexing of pensions, the fight against tax evasion in the field. The result is an imbalanced pension fund and the need to cover the pension fund by other taxes and duties. This imbalance cannot exist on long term, the credibility of the system being put in danger. Thus, there would be appropriate to take emergency measures including encouraging the development of voluntary pension system, the flexibility of the labour market and not at last a demographic policy focused on increasing the birth-rate.
Keywords: Public Pensions, State Social Security, Pension Fund, Dependency Ratio
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