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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

3.6. Pension indexation

The legislation of the Republic of Moldova envisages annual indexation of the state social insurance pensions. The indexation coefficient should constitute an average value between the average annual increase of the consumer cost index and annual increase of average wage for the previous year. From the social insurance budget it is indexed only that part of pensions which is financed from this budget. This indexation mechanism has been introduced in 2003. Earlier  the law envisaged the pension indexation only if the inflation rate was increasing by 5% compared to previous indexation. However, this procedure was not used and there was no pension indexation, because at that time much attention was paid first of all to acquittance of pension arrears and the indexation mechanism was not established1. After the clearing of all debts during 2000-2002 all pensions paid from the social insurance budget were recounted three times. As result at the end of 2002 all pensions were increased by two times. This approach to the adjustment of pensions in Moldova was found unacceptable. From the point of view of the specialists of the Ministry of Labor and Social Protection this has led to the deregulation of the correlation established by the law between the pensions of different categories of beneficiaries. In the process of recounting different unreasoned sizes of increases of old-age pensions for agricultural workers and other workers, as well as of disability pensions were established. Besides the differentiation between the pensions regulated by the Law on state social insurance pensions and pensions regulated by other laws has changed2.

The first indexation under the new law was made in 2003. According to the legislation all pensions had to be indexed by 19,3%. However, the law envisaged certain limits to pension increase. First of all, only that part of pensions not exceeding 3 minimal old-age pensions was subject to indexation. Besides the increase of the old age pensions had not be less than 50 lei. The minimal pension was also indexed, constituting (except agricultural workers) 185 lei. As result, a more considerable increase of pensions was for beneficiaries of smaller pensions.

Obviously, such indexation with established high and low limits could not be found adequate to the mechanism of pension indexation, established by the legislation. At the same time it is clear the wish of the authorities given limited resources to increase the standard of living of pensioners, having minimal livelihood. We should recognize that such indexation schemes lead to equalization in the pension system.

Since 2004 the pension indexation was made regularly, annually from April 1, as it is envisaged in the Law on state social insurance budget. So in 2004 the pensions were indexed by 22,3%3, in 2005 – by 18.2%4, and in 2006 – by 15.7%5.  The strategic plan of social protection expenditures for 2007-2009 also envisages the update of pension size depending on the increase of consumer costs and wages by means of indexation. It is expected that in the period from 2007 to 2009 the pensions shall be indexed by 17.5%, 15.5 and, correspondingly, by 13.8%.

It is to be mentioned that in 2004 besides the planned indexation there was a considerable increase of pensions according to the Law no.324 from October 7, 2004 on amending the Law on state social insurance pensions no.156 from October 14, 1998. This Law stipulates the increase of the coefficients used in pension formulas for old-age and disability pension calculation, as well as the amount of average monthly wage in the country, based on which the pensions were assigned until January 1, 2001. As result the increase of recalculated pensions should constitute at least 25%. Besides the Law established from November 1, 2004 the minimal size of the full pension for the main categories of beneficiaries. Following this legislative initiative (given the indexation made in April) the old age pension has increased in 2004 by more than 50% compared to 2003.



1. Annual social report for 2002 of the Ministry of Labor and Social Protection of the Republic of Moldova.

2. Annual social report for 2002 of the Ministry of Labor and Social Protection of the Republic of Moldova.

3. Decision no.278of the Government of the Republic of Moldova from March 22, 2004 on pension indexation.

4. Decision no.291of the Government of the Republic of Moldova from March 17, 2005 on indexation of social insurance benefits and certain state social benefits.

5. Decision no.297 of the Government of the Republic of Moldova from March 21, 2006 on  indexation of social insurance benefits and certain state social benefits.


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