Cross-border analysis compares pension systems in Italy, Croatia, Ireland, Spain, and others.
🔗 Read the article on hotnews.ro
[This is an automatically generated summary, for reference only]
The Romanian government’s pension reforms were reportedly inspired by models from Italy, Croatia, South Africa, Ireland, and Poland, according to cross-border documentation on pensions compiled for HotNews. This article is part of the European PULSE project promoting cross-border journalistic partnerships. In contrast to the Romanian proposal, Croatian private pension withdrawals are not taxed. The new Romanian law allows beneficiaries to withdraw a maximum of 30% from their Pillar II and III pension funds.
The Croatian pension system began reforming in 1999 and consists of three pillars: mandatory solidarity-based insurance (Pillar I), mandatory individual capitalization savings (Pillar II), and voluntary individual capitalization savings (Pillar III). While Pillars I and II are compulsory, Pillar III is voluntary, with state subsidies available. In Croatia, only 27% of employed individuals contribute to Pillar III. Pension payments from Pillar III can start as early as age 55 or even 50 if enrolled before 2019, and there is an option for a single lump-sum payment up to 30% of the total personal account funds.
In Ireland, most people receive a state pension at retirement (currently age 66). Among workers with pensions, 67% have some form of coverage, with many having only occupational or private pensions. While private pension income is taxable like regular income, lump-sum payments are subject to different tax rules. Individuals can benefit from a lifetime tax exemption limit of €200,000 for all retirement lump sums; amounts exceeding this are taxed at 20% (up to €500,000) or 40% (over €500,000).
In Spain, there were approximately eight million individuals with private pension plans. While savings can be withdrawn from age 65, withdrawing the entire sum at once may result in a high tax liability because all savings, including contributions and capital gains, are included in the taxable income under the progressive Personal Income Tax (IRPF). However, staggered withdrawals or life annuities are possible, with pensions being taxed according to IRPF.
