ROMANIA
 

Speech

by

Mr. Petre Ciotlos
Secretary of State Ministry of Labour and Social Solidarity
President of National House of Pensions and other Social Insurance Rights

at the
Second World Assembly on Ageing

Madrid, Spain
9th April 2002

In a world facing a constant increase of elderly, the dynamic of phenomenon makes us think about the future of some active aging politics. 
It is already well known that the rapid demographic transition (due to life expectation increase) and the fertility decline led to a rapid increase of elderly percentage within total population. From this perspective, with a view to implement best possible arrangements able to ensure a decent living standard and safety for elderly, as well as proper health services, consistent with human dignity demands. 

        I. Different systems, similar challenges; gender issue, socio-economic status, other social factors 

        I A. The complex reform of Romanian social insurance system in the context of a pension system global crisis 

The pension public system (and other social insurance benefits) became lately an economical politics issue of maximum present interest and a priority of social protection system reform as a whole. 
Recent trends of social insurance system proved the necessity of a rapid reform, at least from a parameter point of view; next step will be the completion of a legislative and institutional framework by carrying on a systemic reform meaning to create a complex pension system based on more components. 
Once Law no. 19/2000 (on pension public system and other social insurance benefits) came into force (on 1st of April, 2001), the Romanian Government started the above mentioned reform. 
The pension public system stands for a first component of the multi-pillar system; it's a unique PAYG system state guaranteed, based on re-distribution principle. It is seen as a modern regulation, consistent with European legislation. 
The new legislation (on pension public system and other social insurance benefits) provides, as a priority, the increase of social insurance budget financial sustainability, by growing incomes and lower expenditures. 
The pension system reform aims, as main concerns, at adopting and implementing some measures with a view to fully cover inflation and prices increasing rate influence on pensions, as well as to eliminate all unbalances and/ or inequities between pension levels granted according to previous legislation. 

I B. Pension reform within a multi - pillar system (2nd and 3rd pillar) 

The basic principle of multi-pillar pension system is to settle a diversity of pension incomes financing resources by involving here both public sector and private one. Next to a defined benefits scheme, based on re-distribution and solidarity among generations, varied schemes based on capitalization (defined contributions pensions funds, privately administrated) will also work. 
At present, the Draft-law on Pension Funds is almost elaborated. It aims at creating necessary legal and institutional framework for both universal pension funds and optional ones implementation. It is going to be adopted by the end of current year (2002). 

 The advantages of a multi- pillar pension system are: 

 - it creates the opportunity of higher pension levels than that in the unique, re-distributory system; 
 - it makes possible a long term financial sustainability of pension system and an equal treatment for all contributors; 
 - it leads to a significant capital employed in internal market, positively influencing upon economic growth rate and, as a consequence, upon living standard of population. 

Structured as presented above, the Romanian pension system reform keeps in line with those implemented in other central and east-European countries. It is also consistent with European Commission recommendations in the field. 

I C. Social and medical assistance reform; gender issue, social factors 

Technological trends are rapidly spreading; most countries have implemented new technological techniques (now available but not always accessible) able to ensure treatment procedures development for elderly which may be carried on safely. Various studies indicated gender differences concerning both illnesses prevalence and functional abilities. Many instruments used in functions' quantification have a gender particularity, such as food preparing or housekeeping management (influenced by gender). Dependency rate (referring to institutional or daily assistance giving) is influenced by gender, too. Gender particularities differ according to cultural standards, social parts and structure. A real challenge in the carrying on of comparative studies between present-day situation of socioeconomic status, in various countries. 
Late strategy in social assistance centered upon permanent updating of benefits level for those in most disadvantageous conditions, upon improving and 
implementing new programs able to ensure an effective social protection for groups with a major social risk, especially for elderly. 
Accordingly, the Government adopted certain legislation promoting social cohesion, by stimulating community solidarity vis-a-vis most vulnerable persons categories, especially for looking up to elderly rights depending on their specific needs. 

The main goals at national level in the field of elderly social assistance, according to Governing Program, refer to: 

- developing the social assistance system capacity of providing social services for vulnerable groups; 
- encouraging efforts for re-organisation and rehabilitation of elderly care institutions; 
- providing institutional support with a view to develop and diversify proper social services for vulnerable groups; 
- organizing communitary services able to face needs identified at local level. 

II. A multi - disciplinary approach of the phenomena 

In order to understand those differences between elderly, one must follow up more than one kind of approach and, as much as possible, have to integrate them. Only in this way we are able to examine individual physical and sensorial health conditions particularities, on one hand, and social factors involved, on the other. 
Romania wishes to involve experts from various fields in the issue with a view to ensure a comprehensive approach of aging which must refer to medical, psychological and social factors, their integrative action having a synergic effect upon the results. The multidisciplinary approach will be sustained, a higher stress being laid on social and cultural factors. 
The biomedical model has been, in recent years, that which helped us to understand health condition of human being as well as its disabilities. The involved assumptions are fully valid and useful in understanding numerous illnesses that affect mankind. Though, they are not fully comprehensive in understanding incurable, hopeless conditions and/or complex aging process. 
Health World Organisation (HWO) revised the International Classification of Illnesses, Disabilities and Handicaps (I.C.I.D.H.), together with universal principles seeing incapacity as an universal, continuous and contextual phenomenon. The new classification is based on a bio-psycho-social model, an actual synthesis of medical and social models. 
Romania wishes to use I.C.I.D.H., recently adopted by HWO, as a conceptual framework and a common language. I.C.I.D.H. has already been tested in a few 
countries. Although, it has not yet been used for international comparisons, one of its main objectives.
Romania wishes also to promote a functional approach (physical and sensorial), to explore the possibility of analyzing differences between states within a more comprehensive European approach, as well as to identify primary preventive factors.
As a future approach of aging, Romania aims at: 

- analyzing the impact of socio-economic and health factors in early and mature life; 

- continuously studying aging from a multi- disciplinary perspective; 

- completing present pension system according to world economy experience and trend.