Home
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

4.6. Demographic forecast

In the last decade (1995-2005) the demographic situation in the Republic of Moldova was not favorable. The number of population went down slowly and constituted in 2005 – 3,6 million persons (except Transnistria), i.e. annually Moldova was losing from 7 to 10 thousand persons. The gradual ageing of population was noticed. The number of persons over 60 per 100 persons increased from 13,1 to 13,6 persons. The summary birth rate coefficient went down considerably from 1,74 to 1,26 and as result the share of children up to 15 was reduced from 28,6% in 1995 to 19,0% in 2005. It is to be mentioned that in 2003 the birth rate coefficient was lower than in 2005 and constituted only 1,21. The positive dynamics related to this indicator allows hoping in the improvement in future of the demographic situation in Moldova.

A serious problem for Moldova remains the quite low population life expectancy and over mortality of able-bodied men. So the mortality coefficient for men aged 16-62 constituted in 2003 – 759 (per 100000 men of this age) and for women – 284 (per 100000 women aged 16-57). This leads to significant differences in the life expectancy of men and women. According to the official data the life expectancy of men constituted (in 2003-2005) 64,4-63,8 years, while of women – 71,6-71,7 years. In average, the women in Moldova live by 7-8 years more than men. It is to be mentioned that this situation is specific for many CIS countries. Generally, in CIS countries the index of life expectancy of men is evaluated at 62 years, of women – at 72 years. At the same time it should be remembered that when speaking about discrepancy in men’s and women’s mortality rates, we should understand that this difference is not the same at young, middle and advanced ages. The maximal discrepancy is specific for middle ages. At young ages the boys’ mortality rate is higher by 30-50% than girls mortality rate. At advanced ages (over 70) the discrepancy is not so great, however it constitutes up to 30%. Thus, it could be stated that regardless of the fact that Moldova is characterized by more favorable indices of life expectancy than in CIS countries, they point out to serious mortality problems in a gender aspect in the country.

The population migration is a phenomenon, which has an impact on the depopulation of Moldovan population. Its contribution to this process in different years was evaluated within the limits between 50% and 70%. The greatest number of emigrants in the country was fixed in 2000 – 9128 persons. By 2002 the value of this indicator went down, constituting 6592 persons and then in 2003 it grew up again to 7376 persons. In the last three years this indicator has a tendency to reduction that combined with certain increase in the immigration process allowed to diminish the negative sold between the emigrants and immigrants from 7807 persons in 2000 to 4771 persons in 2005. Certainly the flow of the labor force out of the country is a negative phenomenon, however, in the globalization period when the mobility of the labor force is great, it will be probably impossible to avoid migration processes. Only the dynamic development of the economy of the Republic of Moldova could weaken the impact of this process and ensure the demand for labor force in the native country.

In the Republic of Moldova there is no official long-term (until 2050) demographic forecast. Therefore, for the purpose of pension system modeling two scenarios of country demographic development have been created. These scenarios were developed on the basis of the data of the state statistics and assumptions about future change of basic demographic indicators.

First scenario – relatively pessimistic. It assumes the cessation of the birth rate reduction and certain growth under favorable economic development, small increase of life expectancy (by maintaining the gap from the developed European countries) and maintenance of migration decrease by certain increase of the number of emigrants to European countries.

Birth rate. It is supposed the maintenance of mainly one-child model of reproductive behavior. The summary birth rate coefficient shall increase slightly from the current level of 1,23 to 1,3 by 2025, and to 1,4 by 2050. The tendency of the increase of the mother middle age and the shift of the maximal birth rate to more advanced ages, and also the growth of the birth rate at the age of 25-20 and 30-34 shall be preserved.

Mortality rate. The mortality indicators shall decrease slightly that shall predetermine a small growth of the life expectancy by 2050 till 69 years for men and 76 for women.

Migration. The migration decrease shall be characterized by a small growth and as result it shall increase from 3,6 thousand persons per year to 6 thousand in 2050 and further it shall preserve the same level up to 2050. The age structure of immigrants shall not change and correspond to the structure of the immigrants of the last years.

Second scenario – relatively optimistic. It assumes the improvement of socio-economic conditions, growth of living standards, demographic policy aimed at supporting the families with children, reduction of mortality rate and migration policy aimed at cessation of migration decrease.

Birth rate. The summary birth rate coefficient shall increase from the current level of 1,23 to 1,4 by 2025 and to 1,6 by 2050.

Mortality rate. The mortality indicators shall decrease (first of all due to reduction of mortality due to blood circulation diseases and other reasons). As result by 2025 the life expectancy indices shall grow from 64,6 to 69 years for men and from 72,5 to 76 years for women, while by 2050 – to 74 years for men and 80 years for women.

Migration. Compared to the first scenario it is supposed that the migration decrease shall go down slightly from 3,6 thousand persons annually to 0 persons by 2050.

The table 4.25 presents the data allowing to compare the main results of the modeling of demographic indicators according to the above-mentioned scenarios.

Table 4.25
Basic parameters and results of the modeling of the perspectives of demographic development of the Republic of Moldova


Indicators

2005

2025

2050

Scenario 1

Scenario 2

Scenario 1

Scenario 2

Scenario 1

Scenario 2

Total number of population, (th. persons)

3589.9

3589.9

3354.7

3456.7

2593.6

3004.0

Population structure (%):

 

 

 

 

 

 

Younger the able-bodied age

19.4

19.4

16.4

16.7

13.5

14.1

Able-bodied age

64.3

64.3

60.4

59.7

50.0

47.9

Elder the able-bodied age

16.3

16.3

23.1

23.6

36.5

38.0

Summary birth rate coefficient

1.23

1.23

1.3

1.4

1.4

1.6

Life expectancy at birth (years)

 

 

 

 

 

 

men

64.6

64.6

67.0

69.0

69.0

74.0

women

72.5

72.5

74.0

76.0

76.0

80.0

Migration (growth per year, th.persons)

-3.6

-3.6

-6.0

-2.0

-6.0

0.0


Both scenarios of demographic development of the Republic of Moldova – relatively pessimistic (first scenario) and relatively optimistic (second scenario) – assume further decrease and population ageing. Under the first scenario the population number shall reduce by 2050 by 996,3 thousand persons, while under the second scenario – by 585,8 thousand persons. The share of able-bodied population shall decrease in the first case by up to 50% and in the second – by 47,9%.

It is to be mentioned that the reduction of population number for the stability of national pension system is not a decisive indicator. From this point of view the more important is the indicator, characterizing the correlation of population of pension and able-bodied age, so called the coefficient of demographic burden of old people. This coefficient, with a certain conditional character (since it is compared with the number of able-bodied, not of employed), allows to think, which part of the pension of one pensioner is covered by one worker. It is to be mentioned that from the beginning of the forecast period (2006) the value of this indicator is quite favorable from the point of view of pension system: 1000 persons of able-bodied age amount to 253 pensioners. However, the population is ageing gradually and according to the developed demographic scenarios, in 2010 – 1000 able-bodied persons shall amount to 267 persons. Beginning with 2011 the value of the coefficient of demographic burden of old people for the considered scenarios begin to differ. By 2025 its value under the first scenario shall constitute 382 persons and under the second scenario – 395 persons. By the end of the forecast period (2050 year) 1000 able-bodied persons shall amount to 730 under the first scenario and 793 pensioners under the second scenario, i.e. the coefficient of demographic burden of old people shall increase by 2,7 and, correspondingly, 2,9 times. This speaks about the fact that after 50 years the issues of state social insurance shall grow. As it could be seen the sharp growth of the coefficient of demographic burden of old people takes place under any considered demographic scenario, since the increase of the life expectancy and decrease of the birth rate is an European tendency and Moldova is not an exception. The described tendencies are presented on the pictures 4.6 and 4.7.


Picture 4.6. Comparison of demographic scenarios: population number.

 

Picture 4.7. Comparison of demographic scenarios: coefficient of old people burden.

Thus, it could be concluded that under any considered demographic scenarios the issues of the pension system shall be the same. In this relation in the process of projecting the perspectives of pension system development only one scenario was considered – relatively optimistic expecting by the end of forecast period (2050 year) a lower decrease of population and higher life expectancy


Назад К оглавлению Вперед

© Independent Actuarial Information-Analitical Center
Office 342, Building 3a, 1 Khoroshiovsky Proezd, Moscow, 125284 Russia
Tel./fax: (7-495)255-63-08, e-mail: Chief@actuaries.ru