ARHIVELE OLTENIEI - Universitatea din Craiova

302Roxana Radu, Florin NacuPublic pension system operates almost exclusively on a pay-as-you-gobasis: the revenues collected from general taxation or earmarked contributionsfrom the working generation are immediately used to finance the benefits of thecurrently retired generation. In consequence, changes in the number of retireesrelative to the number of employed persons have an immediate effect on thefinancial situation of this pension scheme. A very direct way in which the ratioof retirees to employees is altered arises from changes in the demographicstructure and the ageing of population. The substantial increase in the proportionof elderly people has a considerable impact on the share of public pensionexpenditure in national resources; this development will become even moreimportant in the future as the ageing trend is accentuated. Two are the causes ofthis ageing tendency: low fertility rate and increased life expectancy. Even iffertility rate returns to higher levels in the future, the ageing of the baby-boomgeneration will be dominant for decades. These two phenomena willsubstantially or even dramatically decrease the number of active persons perretiree in the decades to come.The percentage of young, working age and elderly people from thetotal of populationCountry1998 2020- 19 20-59 60+ -19 20-59 60+Albany 42 49 9 32 55 12Bulgaria 26 53 21 14 58 28Czech Republic 25 57 18 19 54 27Estonia 27 54 19 18 56 25Hungary 26 55 19 − − −Latvia 26 54 20 18 57 25Lituania 28 54 18 23 55 21Macedonia 33 54 13 23 54 23Poland 30 54 16 25 53 22Romania 31 52 16 − − −Slovenia 24 57 18 22 52 26Slovakia 30 55 15 19 58 22Source: Phare Consensus, Change and Choice in Social Protection: The Experience ofCentral and Eastern Europe, Pantheron: The University of York, 1999, p. 63, quoted inElaine Fultz, Markus Ruck, Pensions Reform in Central and Eastern Europe: A RecentRevisal Concerning the Reorganization of the National Pension Houses from theCountries Selected 1 .Some analysts of public pension schemes are expecting higher pensionoutlays to be compensated in coming decades by reduced expenditures on otherprogrammes; for example, expenditure on family support and education inparticular may fall as a result of a decrease in the number and proportion ofyoung people. However, the resulting saving in revenue may not provide