The proactive role of HR teams in managing the transition to retirement

Starting from 1 September 2024, Law no. 360/2023 regarding the public pension system came into force, with the exception of certain provisions that apply as of 1 January 2024, such as:

• the possibility for individuals insured in the public pension system to choose between receiving the old-age pension and continuing to work, with the annual consent of the employer, until reaching the age of 70;
• an increase in the value of the pension point for the year 2024 to RON 2,032;
• the possibility to challenge decisions issued by the territorial pension houses to the competent court within 45 days of their notification.

Pensioners can request a recalculation of their pension by including additional income and contribution periods, along with relevant documents

Given the increased interest in verifying contribution periods and requests for pension recalculations following legislative changes to the calculation method, we remind you that a pension can be recalculated upon request. This can be done by including additional income and/or contribution periods, periods deemed equivalent to contribution periods as defined by law, and other relevant documents that may affect pension rights if they were not considered during the initial pension determination.

Additionally, pensioners of retirement age who accumulate contribution periods after registering for pension can request a recalculation of their pension by including these periods, once during a calendar year.

In both cases, the request for pension recalculation is processed within 45 days from the date of registration, with a recalculation decision issued. If additional documents are required, this period may be extended by an additional 30 days.

"Although individuals can obtain certificates or documents attesting to their contribution periods for periods after 1 April 2001, upon request, from the territorial pension houses or in electronic format, in practice, situations often arise where employees or former employees turn to their current or former employer for a document certifying the income earned during that period.", mentioned Cătălina Călinescu, Partner, HR & Payroll, Forvis Mazars in Romania.

Therefore, it is important to remember that for the period starting from 1 April 2001, the issuer is the Pension House, while employers/former employers are responsible for issuing certificates for the periods up to and including 31 March 2001.

For periods following this date, the elements determining the contribution period in the public pension system - including monthly and annual points for insured individuals, are obtained from:

• the nominal record of insured persons, payment obligations to the state social security budget;
• nominal insurance declarations;
• the social insurance contract or individual insurance declaration, where applicable.

As an exception, when employment or service relationships for periods after 31 March 2001, cannot be proven through the nominal insurance declaration, other supporting documents prepared in accordance with the law may be used to establish the contribution period, monthly points, and annual points.

"For periods prior to 1 April 2001, the total monthly income earned - whether gross or net - on which contributions to the state social security budget were due is used to determine the monthly points. This income is verified through a certificate prepared according to the template provided in Annex no. 6, which is issued based on payroll records by employers, legal archive holders, or economic operators authorised by the National Archives to provide archival services, all of whom have the legal right to certify this data.", mentioned Alina Vlad, Manager, HR & Payroll, Forvis Mazars in Romania.

The pension recalculation file must include the following documents:

• Request for pension recalculation (Annex no. 16 of the application rules for Law no. 360/2023) - available here;
• Identity document;
• Employment record book – original and copy;
• Certificates with information extracted from the general registers of employees submitted by employers;
• Certificates/attestations issued under the law by the National Archives or by the legal holders of the archives of former employers;
• Court rulings that reconstitute the elements necessary for establishing pension rights;
• Other documents provided by law regarding the contribution period and the gross monthly income earned.

It is important to note that, as a result of the recalculation process, a more favourable pension amount and the total number of points resulting from the recalculation will be granted.

Given the complexity and importance of the process, the HR teams can act as valuable support in counseling and preparing for retirement

Human resources (HR) teams play a crucial role in supporting employees through the complex process of pension recalculation, significantly impacting their financial future. In an ever-changing legislative context, HR must facilitate access to accurate and up-to-date information regarding contribution periods and pension rights. By collaborating with employees, HR teams can help verify and update the necessary documentation for pension recalculation, ensuring that income and work tenure are accurately reflected in the assessment of pension rights.

Alina adds: „An important aspect that HR can highlight is the possibility for employees to work, even after retirement, also in accordance with the current Pension Law. This option allows employees to accumulate additional income, thus contributing to a better financial situation before fully retiring. Additionally, HR can provide information about early retirement, which allows employees to retire up to five years before the standard retirement age if they have completed full contributory service or exceeded full contributory service by up to 5 years, an important advantage for those who want to plan their career and personal life effectively.

In addition, the HR teams can organise informational sessions to help employees better understand the available options regarding pensions, including the benefits of occupational pensions (pillar IV). These initiatives not only enhance employees' knowledge but also provide them with the necessary tools to make informed financial decisions that will ensure a comfortable and sustainable pension.”

Beyond merely providing information, HR is pivotal in managing the transition to retirement. This process can often be stressful for employees, and the support of the HR team can make a significant difference.

By offering counseling and resources, HR can help employees navigate this period of change more easily, contributing to a smoother and less stressful transition. Essentially, HR teams play an important role in transforming the pension recalculation process into a positive experience for employees. They contribute not only by clarifying financial rights but also by developing personalised strategies that address individual needs.

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Contact(s)

Emilia Popa, Head of Marketing, Communication, and Business Development,

Forvis Mazars in CEE & in Romania
Emilia.Popa@mazars.ro  / +40 741 111 042

Mădălina Lazăr, PR & Corporate Communication Manager, Forvis Mazars in Romania

Madalina.Lazar@mazars.ro  / +40 763 385 622

About Forvis Mazars

Forvis Mazars is a leading global professional services network. The network operates under a single brand worldwide, with just two members: Forvis Mazars LLP in the United States and Forvis Mazars Group SC, an internationally integrated partnership operating in over 100 countries and territories. Both member firms share a commitment to providing an unmatched client experience, delivering audit & assurance, tax and advisory services around the world. Together, our strategic vision strives to move our clients, people, industry and communities forward.  

Forvis Mazars is the brand name for the Forvis Mazars Global network (Forvis Mazars Global Limited) and its two independent members: Forvis Mazars LLP in the United States and Forvis Mazars Group SC. Forvis Mazars Global Limited is a UK private company limited by guarantee and does not provide any services to clients.

Visit forvismazars.com to learn more.

About Forvis Mazars in Romania

In Romania, Forvis Mazars has 29 years of experience in audit, tax, financial advisory, outsourcing, consulting, and sustainability. We empower over 370 people to deliver our promise to clients with confidence.

Visit forvismazars.com/roto learn more.