The Association for Privately Administered Pensions in Romania (APAPR) has submitted an amicus curiae to the Constitutional Court in support of the new private pension law, following the High Court of Cassation and Justice’s (ÎCCJ) criticism of the law.

The law on the payment of private pensions, which was passed by the government in August and adopted on 15 October, has caused division within the country’s pension and legal sector.

On 16 October, the ÎCCJ referred the law to the Constitutional Court for a review as it believes the law violates the right to private property, guaranteed by the provisions of article 44 of the constitution.

It also said it violates the principle of proportionality provided for in article 53 of the constitution and of the principle of equality of rights provided for in article 16, paragraph two of the constitution.

Furthermore, it argued that it violates the principle of legality, security of legal relations and legitimate trust, provided for in article one paragraphs three and five of the constitution.

In response, the APAPR said the aim of its amicus curiae is to provide the court with legal and economic analysis relevant to the assessment of the constitutionality of the legal provisions criticised by the ÎCCJ.

“APAPR argues that the law on the payment of private pensions is a necessary step in the maturation of the private pension system and that the critical arguments can be put into perspective in such a way as to show the compatibility of its provisions with the constitution,” the association argued.

It said it had formulated the opinion in the “spirit of loyal institutional cooperation”, in order to provide a reasoned basis to support the constitutional court in “clarifying the legal and economic issues relevant to the resolution of complaints regarding the unconstitutionality of acts adopted by the Romanian parliament”.

It has called on the Constitutional Court to declare that the law does not violate constitutional provisions, as “the regulation of payment methods falls within the legislator's margin of appreciation, pursues legitimate purposes and is subject to the proportionality test”.

This latest dispute follows on from the summer when the country’s Financial Supervisory Authority (ASF) was criticised for excluding the country’s only EU-affiliated consumer association from a key consultation on the pension reform.

The Association of Romanian Financial Services Users (AURSF), backed by Better Finance, accused the ASF of excluding it from a debate and instead only inviting representatives from the finance industry.

AURSF chairman, Alin Iacob, told European Pensions at the time that he did not “understand” why the ASF was so reluctant to include his association in a public debate. He added that the association was not consulted on the drafting of the law either.

The reform aims to help Romania meet the requirements to join the OECD and resolve long-standing issues, as payout legislation has been overdue since 2011.

The legislation allows an initial withdrawal of up to 30 per cent of total assets, with the remainder paid out over at least eight years.

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