ROMANIA - Romania's parliament has approved changes to the national pension system in order to qualify for a €900m ($1.2bn) loan from the International Monetary Fund.
The new legislation increases the retirement age for both men and women to 65 and reduces the number of workers exempt from paying into the system.
In order to unlock the next loan instalment the government must also produce documents showing it has paid 1.9bn lei ($567m) of overdue debts to health-care companies before the IMF board meets on September 24.
Romania, the European Union's second-poorest country, is relying on a €20bn loan to help it recover from its worst ever recession.
The changes will improve financing of pensions and streamline the system, Prime Minister Emil Boc told parliament. The new retirement age will take effect in 2030, with everyone who has contributed to the system for at least 15 years qualifying for a pension.
The measures will also help Romania qualify for a €300m loan from the World Bank.
Romanian Pension Fund Association (APAPR) secretary general Mihai Bobocea said the changes are welcome but more tightening is necessary.
"We are looking forward to the adoption of these changes over the next six months. The system is still a little bit too generous but I believe the government will address this next year."
Read more about Romania's pension system, including its regulation , investment strategy and an interview with the Private Pension System Supervisory Commission (CSSPP) in the latest issue of Global Pensions.
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