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How to retire faster: what it means to buy seniority, in fact

By Government Emergency Ordinance no. 163/2020, Romanians have gained the opportunity to buy seniority to complete the pension period. However, the wording in question comes with many questions. Fortunately, there are answers.

The decision of the Romanian Government does not have the effect of facilitating early retirement because you put some money aside. On the other hand, if you have gaps during the CAS contribution period, you can pay for the latter in order to retire at the age limit. Thus, from the past, you can pay the social insurance contribution for a period of up to six years.

But if you are 59 years old and want to retire six years in advance, because you have the money to pay your CAS contribution for the next 6 years, this it's impossible. GEO 163/2020 was not introduced for this. Only those who have reached the age limit for retirement can flirt with the possibility of “buying old age”.

Another important detail concerns those who are already retired and hope to buy the latter's seniority in order to increase the value of their pension. This is also an impossibility. The document clearly specifies that it only targets people who “do not have the quality of pensioners”, it means that it is about any right to a pension.

The mechanism only helps to complete the latter, not for the future, the periods in which the person is not included in the system with paid contribution, but for the old-age pension, not for another type of pension. In other words, the mechanism does not help those who want to pay CAS in order to retire faster.

Regarding the limit of six years in the GEO, the respective years do not have to be consecutive, and the respective value is defined as a maximum. Consequently, a person with three years and four months of non-contribution is as entitled to benefit from this system as one who lacks one year and two months of contributions.

The people from have a very detailed example in order to understand in practice the particularities of the new system for buying antiques, together with the related costs:

If the person has a break from contributing between 2015 and 2017, he has a few months left in 2019 and another three or four more this year. It is important that all these periods do not exceed six years, as only that can be covered by GEO 163/2020. If it is, say, 43 months of non-contributory coverage and the person has the opportunity to pay 43 months of CAS, then he can make the payment from a fire or in installments, but at most until on August 31, 2021.

If they no longer have to pay all the installments, the contributions that were paid based on the contract with the pension house will be taken into account (ie as long as the taxpayer has been able to pay). What is paid, in fact, is the CAS quota (25%) applied to the minimum gross salary in force at the date of signing the contract with the house – currently, 2,080 lei – ie 520 lei / month of non-contribution . For 43 months (ie under four years), this means 22,360 lei. Whoever wants to cover their fixed six years (72 months) of contributions will have to take it out of their pocket 37,440 lei.