
1. Introduction 2. Actuary expertise 3. Basics of the pension legislation of the Republic of Moldova 4. Demographic situation in the Republic of Moldova 5. Current macroeconomic situation 6. Background information on pension insurance 8. Outputs and perspectives of the development of pension system of the Republic of Moldova 9. Annex: Analysis of the risks of the NonFinancial Defined Contribution (NDC) and Financial Defined Contribution (FDC) pension systems

Pension system of the Republic of Moldova: actuary expertise
3.5. Pension formulasCalculation of oldage pensions The Law of the Republic of Moldova on state social insurance pensions envisages various formulas for oldage pension calculation depending on the size of length of insured service (both general and gained after 1999^{1}). A) If the pensioner length of insured service, gained after 1999 is equal or is over 20 years, the size of pension is proportionate to the average insured income, calculated according to the following formula:
where:  amount of contributions paid for insurance period;  amount of contributions, set for insurance period;  number of months for which contributions are paid. Note. The Law on state social insurance pension does not envisage a mechanism of contributions indexation. For each confirmed year of length of insured service up to 35 years 1,2% is added and over 35 years of length of service – 2% of the average monthly insured income. Upon 35 years of length of service, the size of pension is increasing by 2% of the insured income for each year worked after the achievement of the retirement age. As result, we have the following formula for oldage pension calculation: (3.1) where:  average monthly insured income;  required length of insured service (35 years);  confirmed length of insured service;  actual pension age;  established pension age. B) If the pensioner length of insured service, gained after 1999 is less 20 years, the pension consists of two parts, estimating the pension rights, gained before and after 1999 and is calculated according to the following formula: where:  pension size;  pension size, calculated for the period till 1999;  pension size, calculated for the period after 1999, is calculated according to the formula 2.1;  length of insured service till 1999;  length of insured service after 1999. The formula for the calculation of the pension size for the period till 1999, consists of two components:
where:  calculated minimal oldage pension size is different for the pensioners from the number of agricultural workers and other pensioners. The calculated minimal pension size is by 10 lei lower than the minimal pension, the size of which is established annually by the Government (as a rule, though it is not envisaged in the law, the indexation rates of the minimal pension coincide with pension indexation rates). The dynamics of the change of minimal pension size for different categories of pensioners is shown in table 3.1;  average monthly wage, from which the social insurance contributions were paid for the year preceding the retirement year;  individual coefficient of the pensioner. Table 3.1 Minimal pension size
Calculation of disability pensions The Law of the Republic of Moldova on state social insurance pensions envisages various formulas for disability pension calculation for the persons, who retired before and after 2010. A) If the pensioner retired after 2010, the size of disability pension is proportionate to the average insured income and is calculated according to the following formulas: For the Ist disability gravity:
For the IInd disability gravity: (3.2) For the IIIrd disability gravity:
where:  average monthly insured income;  confirmed length of insured service;  maximum possible length of insured service for the period from 18 to the established retirement age; B) If the pensioner retired till 2010, the disability pension consists of two parts and takes into account the length of insured service, gained before and after 1999. It is calculated according to the following formula: where:  pension size;  pension size, calculated for the period till 1999;  pension size, calculated for the period after 1999, is calculated according to the formula 2.2;  length of insured service before 1999;  length of insured service after 1999. The formula for the calculation of the pension size for the period till 1999, consists of two components: For the Ist disability gravity:
For the IInd disability gravity:
For the IIIrd disability gravity:
where:  calculated minimal disability pension size for the Ist, IInd and IIIrd disability gravity. The dynamics of the change of minimal pension size for pensioners of different disability gravity is shown in table 3.2 (to be reminded that the calculated minimal pension size is by 10 lei lower than the minimal pension);  average monthly wage, from which the social insurance contributions were paid for the year preceding the retirement year;  individual coefficient of the pensioner. Table 3.2
1. The entry into force of the Law of the Republic of Moldova on state social insurance pensions. 
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