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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

4.5. Population natality and reproduction

The dynamics of the birth and death rates, described above, determines the indicators (absolute and relative) of the population growth and decrease. Moldova is characterized by quite sharp transition from a high level of natality at the end of ‘80th to negative indexes. The population decrease, conditioned by the exceeding of mortality rate over birth rate has started in 1999, while in Russia – in 1992. Though the decrease indicators are not so great – less than 2%, the volume of the exceeding of the mortality over birth shall demonstrate an evident tendency to growth.

Table 4.22
Dynamics of the population natality indexes in the Republic of Moldova in 1989-2005.


years

Absolute value of the population natality

General natality coefficient (per 1000 persons)

1989

42108

9.7

1995

3442

0.8

1996

2117

0.5

1997

2626

0.7

1998

1410

0.4

1999

–2814

–0.7

2000

–4285

–1.1

2001

–3627

–1.0

2002

–6147

–1.7

2003

–6608

–1.8

2004

–3396

–1.0

2005

–6994

–1.9

Because the mortality is higher in rural habitats than in urban habitats and the difference in the birth rate is decreasing gradually, the indices of the natality of rural population are higher than in urban habitats. Due to a great migration flow the urban population is reducing in a greater degree than the rural population.

Table 4.23
Dynamics of the general natality coefficient of urban and rural population of the Republic of Moldova in 1990-2004.


years

Urban population

Rural population

1990

9.3

6.6

1995

1.5

0.2

1996

0.6

0.4

1997

0.9

0.6

1998

0.7

0.2

1999

-0.1

-1.2

2000

-0.4

-1.8

2001

-0.2

-1.6

2002

-0.3

-2.7

2003

-0.5

-2.7

2004

0.5

-1.9

If the indices of population natality reflect its current annual dynamics, the indices of population reproduction characterize the process of population replacement, as result of existing birth and mortality conditions.

The indices of population reproduction require to be correctly used. They allow evaluating how the population number changed if its age structure corresponded to the existing population reproduction. Now the age structure has changed due to demographic tendencies of previous years. It should be remembered that the long maintenance of the current mortality rate and more important of the birth rate (only a stable intensive migration could prevent this) leads inevitably to the corresponding age distribution of population. Then it shall have a negative impact on the dynamics of its number despite possible improvement of population reproduction conditions.

Thus, the indices of population reproduction represent an integral evaluation of the existing birth and mortality conditions and serve as a kind of forecast-prevention, which allows to see what shall happen with the population if the demographic tendencies do not change.

The key characteristic of the population reproduction is the net-coefficient of population reproduction. It describes the degree of replacement of parental generation by child generation. If this value exceeds 1, the reproduction is more extensive, i.e. the number of population is increasing from generation to generation. If it is less 1, the reproduction is short-cut, i.e. the number of population is reducing from generation to generation. The value of this index equal to 1 speaks about a simple reproduction and the number of population is not changing from generation to generation.

In 2001-2005 the value of the net-coefficient of population reproduction in the Republic of Moldova constituted 0,6. This means that each new generation is by 40% less than the previous generation (only 6 daughters replace each 10 women).

Table 4.24
Dynamics of net-coefficient of population reproduction in the Republic of Moldova in 1990-2005.


years

Net-coefficient of population reproduction

1990

1.13

1991

1.07

1992

1.05

1993

0.97

1994

0.91

1995

0.82

1996

0.75

1997

0.78

1998

0.73

1999

0.73

2000

0.73

2001

0.60

2002

0.58

2003

0.58

2004

0.60

2005

0.58

For 2003-2005 - evaluation

If the net-coefficient shows the proportion of generations replacement provided that the population age structure meets the population reproduction conditions, the true natality coefficient shows which shall be the annual change of population number. Under a net-coefficient higher than 1, the true natality coefficient shall be positive, under a net-coefficient less 1 – negative and net-coefficient equal to 1 - zero.

This natality coefficient is called “true”, because compared to the general natality coefficient, it does not depend on the peculiarities of the sex/age structure, created under the influence of past demographic tendencies and migration, and is conditioned only by population reproduction conditions.

In 2004 the true natality coefficient of Moldovan population constituted 19,6%. If the age population structure corresponded to the current birth and death rates, the annual natural decrease of population should constitute about 2,0%, i.e. was higher by 10 times than the current decrease.

The model of stable population is created on the basis of the true natality coefficient. This is a theoretical population model, keeping unchangeable the age characteristics of birth and death rates, and also population age structure.

Picture 4.5. Sex/age pyramid of stable population, corresponding to the population reproduction conditions in the Republic of Moldova in 2004.

The model of stable population shows which population age structure corresponds to the conditions of population reproduction, i.e. correlation between birth and death rates. In reality the stable population does not exist, because for its formation it is necessary that the age coefficients of natality and mortality do not change a long period of time (several decades). Besides this population should be closed, i.e. the migration should not influence the change of its number and structure.

At the same time the model of stable population is an important tool of demographic analysis. First of all because it allows to evaluate to which sex/age population structure the existing condition of its reproduction could lead.

The share of population younger than 15 out of the stable population, corresponding to the current reproduction of Moldovan population constitutes 11,1%, at the age of 15-64 – 65,0%, at the age of 65 and over – 23,9%


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