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Romania assembly approves IMF-backed pension reform

* Improves chances of keeping IMF bailout on track

* Government still needs to pass budget, wage reform

BUCHAREST, Dec 7 (Reuters) - Romania’s parliament approved IMF-backed pension reforms on Tuesday, improving its chances of keeping a vital 20 billion euro international bailout on track.

The law aims to streamline a bloated communist-era pension system of over 5 million retirees and is a key requirement under the International Monetary Fund-led aid deal.

The coalition government of Prime Minister Emil Boc, which commands a slim majority in parliament, must also squeeze the 2011 budget and a wage reform bill through parliament by the end of this year in order to receive fresh IMF loans in January.

Boc has survived two parliamentary no-confidence motions filed by the leftist opposition so far this year, but analysts expect he should be able to clear outstanding legislation.

The pension reform passed parliament with 172 votes among 282 present deputies. “Today’s vote shows responsibility,” Labour Minister Ioan Botis told parliament.

The government aims to index state pensions to inflation rather than to average wages, which would reduce payouts. It would also eliminate special pensions for certain state sector employees like policemen or soldiers.

The reform also raises the retirement age to 63 years for women and 65 for men by 2030. It is now 58 for women and 63 for men.

Under the two-year bailout which expires in March, Bucharest enforced drastic spending cut and tax hikes and axed thousands of jobs to meet this year’s ambitious deficit target and ease concerns about its finances. (Reporting by Radu Marinas; editing by Mark Heinrich)

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