October 17, 2026, 4:36 p.m.

How Much Does the State Steal from the Future Romanian Pensioner?

In short — set against the average return on private saving, the state deprives the insured of a sum between 631,000 and 948,000 lei, depending on how long he lives after retirement… if he gets there at all!

If he dies in the first year of retirement, the state “keeps” 556,875 lei paid in net, without reckoning any interest on it.

It is simple, it is arithmetic.

Here is the demonstration: the Romanian pensioner, paid all his life at the level of the MINIMUM WAGE (!!!), in order to be able to “spend” everything he contributed over a lifetime, would have to live at least 105 years (public pension plus the gross Pillar II capital) or 117 years and one month — and we are not even speaking of those on the average or the top wage. (Public pension only, without Pillar II.) Or, if you want a figure: saving the whole of the contribution, at 5% gross a year for 45 years, leaves about 1.65 million lei after the tax on interest and the health contribution. The difference against the cumulated public pensions plus the gross Pillar II capital is about 631,000–948,000 lei, depending on the lifespan considered…

And everything examined below leaves out the sad case in which you do not get to enjoy a single day of pension — a case in which the state keeps all the money, and your heirs are deprived even of the right to be thanked for having had their inheritance cut by hundreds of thousands, if not millions, of lei, and that from a man on the minimum wage!

A clean social state, this Romania of ours… that is to say, we take from society and give to the state and to the oligarchs who control it — to Rheinmetall, for instance! Article 1(3) says that “Romania is a state governed by the rule of law, democratic and social…” At this moment every one of those notions has been definitively compromised in the Second Republic!

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Below, for the curious, I set out the demonstration at length, and a comparison between the compulsory pension and the individual saving of the same contribution.

A little earlier I had a conversation with a friend and we put to ourselves the question in the title above — the classic question, “how much does the state steal from us?” Opinions were divided… I was convinced that the pensioner is gravely fleeced by the state; he held that the state “gains”, but gains little, moderately, from our contributions.

Of course I removed from our model the “social character” (the fact that those who pay pension contributions today are not paying for themselves but for today’s pensioners), and with it the danger of the Ponzi scheme that hangs over the pension systems of the whole civilised world.

So as to have a simple benchmark and not lose ourselves in legislative changes and in the movement of wages over time, I took as a benchmark a citizen who takes a job today and is paid the minimum wage throughout his working life, contributing to the pension without interruption for 45 years.

The question around which the dispute arose is this: if the young employee could keep that money and put it in the bank every month, reinvesting the interest, would he have more in his old age than the state gives him? I was already convinced that he would, but I did not know by how much.

Naturally, for a quick answer with little chance of arithmetical error, I turned to AI. Here is what it told us:

“In our simulation, at a constant annual interest of 5%, the difference exceeds a million lei in favour of individual saving, even if the man lives to 85. That is a result worth discussing. But to understand what it proves, we must look both at the figures and at their assumptions.

The calculation below estimates an opportunity cost; it does not prove a theft, nor the existence of a sum that the state would collect as profit. (Of course, ChatGPT is extremely “politically correct”, but also prudent, even solicitous, when it reckons on the state’s behalf — which will only strengthen our conclusions! But let us return to the analysis:)

What leaves a man’s wage

We start from the general gross minimum wage of 4,325 lei, applicable from July 2026. For an employee eligible for the 200-lei allowance, the contribution base is 4,125 lei. A social insurance contribution of 25% means 1,031.25 lei a month. [1, 2]

Of that contribution, about 835.31 lei go to the public pension and 195.94 lei to Pillar II. The private component is included in the contribution; it is not paid on top. [3]

Between 20 and 65 there are 540 months of contribution. The total paid would be:

1,031.25 lei × 540 months = 556,875 lei.

For this exercise we hold the wage, the tax allowance and the contribution rates constant throughout.

What would happen if the money were saved individually

We assume the employee could deposit the whole contribution at the end of each month into a bank account, without withdrawals, reinvesting the interest.

At a constant effective gross annual interest of 5%, computed through the equivalent monthly rate, after 45 years he would accumulate:

• 556,875 lei from his own deposits;
• 1,289,627 lei of gross interest actually generated in the taxed scenario;
• 128,963 lei of tax on interest;
• 68,040 lei of health contribution;
• 1,649,499 lei of final capital, net of those fiscal obligations.

The gain remaining above his own deposits is 1,092,624 lei. The values are rounded individually; the calculation uses the unrounded ones. The earlier sum of 2,021,180 lei was computed without taxes. The difference of about 371,682 lei covers both the fiscal obligations and the interest that no longer accrues on the sums taken out of the account.

What taxes we applied

The tax on bank interest is 10%, withheld by the bank when the interest is credited. It does not apply to the deposits themselves and is not deducted once at the end of the 45 years. [6]

Separately, a health contribution may be owed. For 2026 the benchmark is the minimum wage of 4,050 lei as of 1 January, even though the current minimum wage is 4,325 lei. The relevant income thresholds are 24,300, 48,600 and 97,200 lei; the annual health contribution is, as the case may be, 2,430, 4,860 or 9,720 lei. Below 24,300 lei no compulsory contribution arises in this scenario. In placing the interest within the thresholds we use the sum after the withheld tax. [7, 8]

We assume the employee has no other income cumulating towards those thresholds and enjoys no personal exemptions. The health contribution withheld from the wage does not extinguish the obligation on interest that reaches the threshold.

The simulation freezes the 2026 rates and thresholds across 45 full fiscal years, as it does the other parameters. Interest is credited monthly, the 10% tax is withheld monthly, and the health contribution is set aside at the end of each year out of the savings, earning no further interest. The setting-aside is a convention of calculation, not the legal payment term. We do not model a partial first calendar year.

In this model the health contribution appears from year 26: 2,430 lei a year in years 26–37 and 4,860 lei a year in years 38–45. The threshold of 24 minimum wages is not reached. The effective net interest before the health contribution is about 4.4899% a year, because the tax is withheld at each monthly crediting.

Without the health contribution, but with the 10% tax on interest, the capital would be 1,748,436 lei. With both obligations included, 1,649,499 lei remain. The 5% interest is an assumption, not a rate guaranteed for 45 years; we have not included bank charges.

What the pension system offers in the same simulation

Applying the current formula for 45 contributory years, including the stability points and the correction for participation in Pillar II, the estimated public pension is 2,642 lei gross a month.

For this calculation we also froze the reference average wage at 9,192 lei and the value of the reference point at 81 lei. This is not a forecast for the year 2071, but the application of today’s parameters to a hypothetical full career. [4, 5]

Separately, the Pillar II contributions would produce an estimated capital of 384,024 lei, assuming the same annual return of 5%, before taxes and charges.

That capital must be included in the comparison. Leaving it out would exaggerate the disadvantage of the compulsory system.

The difference after taxing the bank savings

We assume that after 65 the public pension is not indexed, and that neither the bank capital nor the private one earns any further return. We thus compare the capital available at retirement with the total of the public pensions received thereafter plus the Pillar II capital.

All the sums in the table are expressed in lei.

The values are rounded to the leu. These are nominal comparisons, without adjustment for inflation or for the moment at which the money is received. The bank capital is after the tax on interest and the health contribution; the public pension and the Pillar II capital are the gross values from the earlier calculation. The table is not a full net-to-net comparison of all receipts: the taxation of Pillar II payments depends on the manner of payment, which is not fixed here. The Pillar II capital is added once; the table does not assume its immediate withdrawal.

For a man who lives to 85, the bank capital would allow him, mathematically, to spend about 6,873 lei a month for 20 years, without a leu of further interest after retirement.

The public pension plus the Pillar II capital spread over the same period would mean about 4,242 lei a month. The difference is some 2,631 lei a month, under the assumptions chosen.

What this comparison can and cannot prove

The public system works by financing current pensions and granting future entitlements. A contribution to Pillar I is not a personal deposit that accumulates interest. Hence the structural difference from individual saving.

Even so, the public pension is paid for life. A capital consumed on a twenty-year plan runs out at 85; the public pension does not stop then. The system also offers protections such as the invalidity pension and the survivor’s pension, under the conditions of the law, which this comparison does not value in money. [5]

Moreover, freezing the pension for decades while assuming a constant positive interest strongly influences the result. Indexation of the pension, movements in interest rates, taxes and inflation can change the difference substantially. Doing away with contributions would also raise the question of financing the existing pensioners, a cost absent from this individual exercise.

How many years would he have to live to equal the bank savings?

For the full comparison in this article we include both the public pension and the Pillar II capital. The bank capital after the tax on interest and the health contribution is 1,649,498.93 lei, and the gross Pillar II capital is 384,024.28 lei. The difference to be covered by the public pension is 1,265,474.65 lei.

At a public pension of 2,642 lei a month, the calculation is:

(1,649,498.93 − 384,024.28) ÷ 2,642 = 478.98 months of pension.

The threshold is reached at the 479th monthly pension, that is, after 39 years and 11 months of retirement. For retirement at 65 this means an age of about 104 years and 11 months — close to 105. At 479 payments the cumulated public pension is 1,265,518 lei; adding the gross Pillar II capital, the total comes to 1,649,542.28 lei.

If we count only the public pension, without Pillar II, equalling the bank capital would require 1,649,498.93 ÷ 2,642 = 624.34 months. The threshold would be passed at the 625th monthly pension, after 52 years and one month of retirement, that is, at about 117 years and one month. This second calculation is only a partial comparison, since it excludes the money accumulated in Pillar II.

These ages express a nominal equalisation of sums, not a forecast and not an actuarial return. We keep the pension unchanged and assume zero interest or return after 65, both for the bank savings and for the private capital. The Pillar II capital is counted once, at its gross value, without modelling the calendar or the taxation of the payments. We do not assess inflation, the moment at which the money is received, or the invalidity and survivor protections. Indexing the pension, or obtaining some return after retirement, would change the age calculated.

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The conclusion (ChatGPT’s politically correct one!!!)

In the scenario examined, saving the whole of the contribution at 5% gross a year for 45 years leaves about 1.65 million lei after the tax on interest and the health contribution. The difference against the cumulated public pensions plus the gross Pillar II capital is about 631,000–948,000 lei, depending on the lifespan considered. The earlier claim that the advantage exceeds a million lei by the age of 85 no longer holds in this taxed version.

Under the same assumptions, the public pension and the gross Pillar II capital would equal the bank savings after tax only after almost 40 years of retirement, at around the age of 105.

We can therefore formulate a precise criticism: the compulsory nature of the contribution carries an opportunity cost, and the citizen has the right to see transparently what protection he receives in exchange for money he cannot (in the sense that he is deprived of the right to) save and manage himself.”

After 45 years of work, this question deserves an answer in figures, with every assumption in plain sight.”

[1] Government Decision no. 146/2026 — the gross minimum wage — Consult the source
[2] ANAF — the non-taxable sum in 2026 — Consult the source
[3] Bucharest Pension House — the indicators for 2026 — Consult the source
[4] Arad County Pension House — information for 2026 — Consult the source
[5] Law no. 360/2023 — including articles 83–85 — Consult the source

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Theme: Romania, Between Law and Lawlessness · Subtheme: On schooling, health and poverty