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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

4. Demographic situation in the Republic of Moldova

4.1. Dynamics of population number and sex/age structure

The number of population of the Republic of Moldova has decreased since the beginning of 90th. Until 1999 the population decrease was exclusively related to the migration flow of inhabitants, since the number of born exceeded the number of deceased and the population natality was preserved. After 1999 the total population decrease is conditioned by two factors: migration and natural decrease.

Table 4.1
Dynamics of population of the Republic of Moldova for 1989-2007.
(th. persons; at the beginning of the year, 1989 year – population census (January 12))


Years

Total population

Urban population

Rural population

1989

4337.6

2036.4

2301.2

1990

4361.6

2069.3

2292.3

1995

4347.9

2033.0

2314.9

1996

4334.4

2004.1

2330.3

1997

3657.3*

1543.6

2113.7

1998

3655.0

1538.2

2116.8

1999

3649.3

1531.8

2117.5

2000

3643.5

1529.2

2114.3

2001

3634.5

1501.4

2133.1

2002

3627.2

1500.2

2127.0

2003

3617.7

1499.1

2118.6

2004

3606.8

1492.9

2113.9

2005

3599.8

1491.0

2108.8

2006

3589.3

1484.8

2104.5

2007

3581.1

1478.0

2103.1

* Until 1996 the data is related to the whole country, including Transnistria, from 1997 – except Transnistria.

The reduction of the population number occurred only in urban habitats, while the number of rural inhabitants grew up. It could be supposed that the increase of the number of rural inhabitants continued steadily until 2001. Such prudent supposition is related to the fact that  the data until 1996 and for the next period are incommensurable, because in the first case it was related to the population including Transnistria, in the second case – without Transnistria. According to the data of the UN Demographic YB, the discrepancy in the average annual number of these populations constituted about 660 thousand persons.

In the last decade (in 2007 compared to 1997) the number of Moldovan population went down by 76,2 thousand persons or 2,1%. In the last 5 years the population decrease was more pronounced. If in 1997-2001 it constituted 0,6%, in 2002-2006 – 1,3%.

The number of urban population went down in the last decade (by 4,3%) that is considerably more than the decrease of rural population (by 0,5%). This has led to the considerable change of correlation between the urban and rural population. If at the beginning of 1997 the urban inhabitants constituted 42,2% and the rural inhabitants – 57,8% at the beginning of 2007 these indices constituted 41,3% and, correspondingly, 58,7%. Thus, the share of rural population is growing.

In the last decade the share of men and women in the total population number was stabilized at the level of 47,8% and, correspondingly, 52,2% and 109 women amount for 100 men.

Along with the reduction of the number of Moldovan population, the considerable change of its age structure occurred.

Table 4.2
Distribution of resident population of the Republic of Moldova by the basic age groups in 1989-2005.
(in %; at the beginning of the year, 1989 – population census (January 12))1


Years

0-14

15-64

65 and over

1989

27.9

64.0

8.1

1995

26.8

64.2

9.0

1996

26.4

64.6

9.0

1997

25.8

65.1

9.1

1998

25.6

65.1

9.3

1999

24.7

66.0

9.3

2000

23.7

66.9

9.4

2001

22.8

67.8

9.5

2002

21.7

68.7

9.6

2003

20.7

69.5

9.8

2004

19.8

70.3

9.9

2005

19.0

71.1

9.9

Firstly, it is to be mentioned the considerable reduction of the share of children and teenagers up to 15 as result of birth rate decrease. At the same time the share of population aged 15-64 was growing up. This growth was more considerable beginning with 1999. The lower but steadily was the increase of the share of old population.

The age structure of population differs greatly in urban and rural habitats.

Picture 4.1. Age structure of urban and rural population of the Republic of Moldova (in %, at the beginning of 2005).

In rural habitats the share of children and teenagers and old population is higher, while the share of population aged 15-64 is quite lower compared to urban habitats.

The age structure of the Moldovan population has been marked by the ascents and recessions from the last decades, so called demographic wave, as result of the shocks and wars, experienced by the republic in the XXth century along with other countries of the former Soviet Union.

The age/sex pyramid shows that the age structures of men and women are similar. They differ at advanced ages – in the age structure of women the share of elderly women is higher than in the male population. The increase by age of the discrepancy in the number of men and women is due to male over-mortality.


Picture 4.2. Sex/age pyramid of the population of the Republic of Moldova (according to 2004 population census).

On the whole the age structure of Moldovan population is quite favorable now. It shall remain such in the nearest future. Quite numerous contingents born in the middle of ‘80th reach the active reproductive age that has a positive impact on the dynamics of the births. From the other side, those born in the war years achieve the elderly ages. Their number is quite low. This contributes to a quite low growth of the burden on pension and social insurance, health, and breaks the growth of the number of deaths.

However, in several years the situation shall change crucially. Quite small groups born at the end of ‘80th and in ‘90th shall reach the reproductive and able-bodied age. So, for example, the number of those who at the moment of 2004 population census had 18 (now the majority of them are 20) constituted 70,4 thousand persons. Those who are younger by 5 years constituted 56,4 thousand persons, i.e. by 19,9% less, while those aged 8 – only 42,5 thousand persons, i.e. by 1,66 times less than those aged 18. Such sharp reduction of the number of persons reaching the reproductive age shall lead to the reduction of the number of births. Since even in case of an active demographic policy, no actions could increase the birth rate so that to compensate such decrease of the number of population of reproductive age.

From the other side, the advanced ages shall not be reached by small groups born in the war years, but on the contrary by quite numerous generations of those born in the after war years when so called compensational natality growth occurred. For example, according to the data of 2004 population census in the Republic of Moldova the population aged 60 constituted 22,1 thousand persons, while those younger by 5 years – 49,3 thousand persons, i.e. by 2,2 times more. Such shifts in the population age structure shall lead to the increase of the burden on the system of pension insurance, social assistance and health, and also shall contribute to the increase of the number of deaths.

Thus, caused by the coming changes in the population age structure, the decrease of the number of born and the increase of the number of deceased shall lead to a considerable growth of the natural decrease of the population of the Republic of Moldova along with its simultaneous evident ageing.


1. Until 1996 the data is related to the whole country, including Transnistria, from 1997 – except Transnistria.

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