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Legislation Publications Pension models About project Statistics
Legislation Publications Pension models About project Statistics

1. Introduction

2. Actuary expertise
2.1. Contents of the actuary expertise
2.2. Actuary control cycle
2.3. Actuary expertise tools

3. Basics of the pension legislation of the Republic of Moldova
3.1. General principles
3.2. Social insurance contributions and taxable basis
3.3. Pension types and conditions of their assignment
3.3.1. Old age pensions
3.3.2. Disability pensions
3.3.3. Survivors pensions
3.3.4. Pensions to some categories of citizens
3.3.5. Social pensions/benefits
3.3.6. Pensions paid from the state budget
3.4. Minimal pension and guaranteed minimum
3.5. Pension formulas
3.6. Pension indexation

4. Demographic situation in the Republic of Moldova
4.1. Dynamics of population number and sex/age structure
4.2. Birth rate
4.3. Mortality and life expectancy
4.4. Marriage and divorce rates
4.5. Population natality and reproduction
4.6. Demographic forecast

5. Current macroeconomic situation
5.1. Tendencies of population economic activity
5.2. Development of basic forecast

6. Background information on pension insurance
6.1. Number of pensioners
6.1.1. Analysis of the number of pensioners
6.1.2. Distribution of the number of pensioners by pension types
6.1.3. Sex/age number of pensioners
6.2. Pensioner’ standard of living
6.2.1. Average size of pensions
6.2.2. Compensation of lost wage
6.2.3. Gender differences in pension sizes

7. Modeling outputs

8. Outputs and perspectives of the development of pension system of the Republic of Moldova

9. Annex: Analysis of the risks of the Non-Financial Defined Contribution (NDC) and Financial Defined Contribution (FDC) pension systems
9.1. Principles of the design of NDC pension system
9.2. Principles of the design of FDC pension system
9.3. Experience of applying FDC schemes
9.4. Comparison of NDC and Funded schemes




Pension system of the Republic of Moldova: actuary expertise

2.3. Actuary expertise tools

To carry out the actuary expertise of the national pension system is only possible by using specialized tools, i.e. a program-methodic set consisting of a system of mutually complementary programs, accomplishing different tasks of the actuary expertise. It is to be mentioned that the corresponding set of applications was developed by the Independent Actuarial Information-Analytical Center during 2004-2007 at the request of the Ministry of Health and Social Protection of the Republic of Moldova. The applications set included the analytical model of the pension system of the Republic of Moldova, pension calculator and middle-term model of the pension system of the Republic of Moldova.

The most important and complicated element of this set is the analytical model of the pension system of the Republic of Moldova, aimed at examining the long-term financial situation of the pension system of the Republic of Moldova on the whole. This is a quite complicated model, containing a great number of initial data and results of the projections and which is complicated due to new tasks conditioned by the developing national pension system. This model as the majority of foreign analogues is based on many-cases model. In the modeling process the population is divided in a range of socio-demographic groups, for which it is forecasted the change of their situation in time. For the forecast is used the discrete limited heterogeneous Marcov process of transition between various states.

“The pension calculator” is aimed at modeling the individual pension of a concrete beneficiary; the parameters of pension history are set by the user.

“The middle-term pension system of the Republic of Moldova” is aimed at middle-term forecasting of the indicators of the Pension Fund balance and evaluation of its solvability and equilibrium, financial stability, impact of indexation on the balance of contributions and payments. Besides, the model represents the tool for operative analysis of the impact of taken decisions in a middle-term perspective.

The developed program complex (set) is a modern tool for the actuary monitoring of the implementation of pension reform in the Republic of Moldova, which is necessary, first of all, for the realization of efficient actions for its improvement and development. All applications are developed on Excel basis by means of VBA, have a module structure, ensuring high level of independency at each level of their operation and, correspondingly, increasing the model flexibility and their appropriateness for modernization.

It should be taken into consideration that in the process of program set operation new requirements shall appear due to the modification of pension laws and external conditions, predetermining new tasks. New requirements shall be made by the developing pension system of the Republic of Moldova. All this shall lead to the development and adjustment of the existing program set to the appearing realities. This work could be performed in two directions: adjustment of the basic analytical model and creation of additional applications.

It is to be mentioned that the basic analytical model of pension system of the Republic of Moldova is a complicated model, containing a great number of initial data and results of calculations. It could not be complicated given new tasks, set by the developing pension system of the Republic of Moldova. However, multiple complication of the model is inexpedient and harmful, since it makes difficult its roll-out that could lead to mistakes, change the core of the results and complicate their interpretation, create a wrong feeling of higher accuracy of results than in reality.

Therefore, a perspective direction along with the improvement of developed models is the development of the program set by means of creating additional programs. For example, development of models for the expertise and evaluation of the expediency of the amendment of pension legislation, which cannot be evaluated by using the existing programs. An example of this kind of task could be the analysis of the efficiency of implementing in the Republic of Moldova of Non-Financial Defined Contribution pension system, development of the system of non-state (additional) pension insurance, including creation of corporative pension systems etc. The efficiency of all possible directions of pension system reform should be checked for the country on the whole, as well as for individual socio-demographic population groups.

It is to be mentioned that the development and improvement of the tools of the actuary expertise of the national pension system should be supported by the collection, maintenance and analysis of a great volume of various statistic information. Given this it could be stated that now for the Republic of Moldova is very actual the issue of creating a resource center responsible for the accumulation of all information required for the actuary monitoring of pension reform; and the Ministries and departments, responsible for collection of this data, shall be obliged to submit it to this center according to the legislation.   


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