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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

3.5. Pension formulas

Calculation of old-age pensions

The Law of the Republic of Moldova on state social insurance pensions envisages various formulas for old-age pension calculation depending on the size of length of insured service (both general and gained after 19991).

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 old-age 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 old-age 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


Category of pensioners

2004

2005

2006

Old-age pensions for agricultural workers

175.08

258.86

299.5

Old-age pensions for other beneficiaries

196.98

290.77

336.42

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


Category of pensioners

2005

2006

Disability pensions Ist gravity

206.85

239.33

Disability pensions IInd gravity

199.76

231.12

Disability pensions IIIrd gravity

140.66

162.74


1. The entry into force of the Law of the Republic of Moldova on state social insurance pensions.


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