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Legislation Publications Pension models About project Statistics
Legislation Publications Pension models About project Statistics

1. Introduction

2. Fundamentals of Moldova’s Pension Legislation
2.1. General Principles
2.2. Insurance Contributions and the Tax Base
2.3. Types of Pensions and Terms and Conditions of Their Assignment
2.3.1. Old-age Pensions
2.3.2. Invalidity Pensions
2.3.3. Survivor’s Pensions
2.3.4. Pensions to Specific Categories of Population
2.3.5. Social Pensions/Benefits
2.3.6. Pensions Paid at the Account of the State Budget
2.4. The Minimal Pension and Guaranteed Minimum
2.5. Pension Indexing

3. The Present-Day Demographic Setting
3.1. General Population Changes
3.2. Fertility
3.3. Mortality and Life Expectancy
3.4. Population Growth and Migration
3.5. The Base Demographic Forecast

4. Demographic Trends in the Economic Activity of the Population
4.1. Demographic Factors Affecting the Number of Population at the Economically Active Age
4.2. The Profiles and Dynamics of the Economic Activity of the Population
4.3. Projection Scenarios for the Economic Activity of the Population

5. General Employment Issues

6. Payers of Pension Contributions
6.1. The Profile and Number of Pension Contribution Payers
6.2. Projection Scenarios for Insurance Contribution Payers

7. Recipients of Pensions/Benefits
7.1. Profile of Pension Recipients
7.2. Old-Age Pensioners
7.3. Invalidity Pensioners
7.4. Recipients of Pensions for Survivors
7.5. Recipients of Social Pensions/Benefits
7.6. Forecast of Pensioner Numbers

8. Present-Day Macroeconomic Environment
8.1. Historical Background
8.2. Base Macroeconomic Forecast

9. Software Complex
9.1. Mission and Structure of the Software
9.2. Computation Scenario Block
9.3. Demography Block
9.4. Macroeconomics Block
9.5. Receipts Block (Calculation of Contributions)
9.6. Expenditure Block
9.7. Output and Reports

10. Approbation of the Model
10.1. Modelling Scenarios
10.2. Simulation Output
10.3. Computations on the Pension Calculator

Annex 1. Base scenario




Development of the Analytical Model of the Republic of Moldova’s Pension System

10. Approbation of the Model

This report was not aimed at a large-scale modelling of the Moldova’s pension system. Outcomes of modelling mentioned below should illustrate opportunities given by the developed Model for analysing pension systems, including those under reforming, rather than explore prospects of their development. The latter problem requires a more thorough reasoning in relation to the modelling objective and scenario parameters/assumptions used for its achievement.

10.1. Modelling Scenarios

All the scenario parameters may be subdivided into two categories:

  1. parameters whose values are set in the base year of the forecast (as a rule, they are statistical data), and
  2. parameters forming time series whose values are set on the basis of assumptions and expert appraisals.

Earlier, in Sections 3-8 we have analysed statistical data provided by the Department of Statistics and Sociology and National Fund of Social Insurance of the Republic of Moldova in order to ground basic scenario parameters and assumptions pertaining to the demographic (see Table 3.11) and macroeconomic (see Table 8.3) forecasts, as well as to the structure and numbers of insurance contributions payers and recipients of pensions and benefits (see paragraphs 6.2 and 7.6). Table 10.1 gives supplementary scenario parameters of the model. Let us note, that some of these parameters are set in the model as time series though in the base scenario they are set as constants for the whole depth of the forecast (in the table such parameters are marked out with colours).

Table 10.1: Scenario parameters of the base year

Parameter category

Parameter name

Value in 2003

Macroeconomics Block

GDP, million lei

27,297

Minimum subsistence level, lei

400

Transfers from the state budget, thousand lei

387,308

Other expenditure of the social insurance system, thousand lei

140,802

Receipts Block

Wage of an employee, lei

891

Wage of an agricultural employee, lei

800

Amount of an annual fixed payment for a self-employed person, lei

600

Amount of an annual fixed payment for a farmer, lei

500

Expenditure Block

Average old-age pension to a former non-agricultural worker, lei

218

Average old-age pension to a former agricultural worker, lei

218

Average invalidity pension, lei

195

Average survivor’s pension, lei

139

Average social pension, lei

150

Average old-age pension to a pensioner not elsewhere specified, lei

306

Guaranteed Minimum to an old-age pensioner, formerly unengaged in agriculture, lei

200

Guaranteed Minimum to an old-age pensioner, formerly engaged in agriculture, lei

180

Pension system

Statutory age of retirement (men), years old

62

Statutory age of retirement (women), years old

57

Rate of contributions for employees, %

26

Rate of contributions for agricultural employees, %

17.6

Contributions collection rate for employees

0.90

Contributions collection rate for agricultural employees

0.80

Contributions collection rate for self-employed persons

0.50

Contributions collection rate for farmers

0.40

Privilege rate for employees

0.85

Coefficient of regression for employees

0.95

Labour market

Share of employees engaged in the formal sector among all the employees

0.95

Share of agricultural employees engaged in the formal sector among all the agricultural employees

0.80

Share of farmers engaged in the formal sector among all the farmers

0.50

Share of self-employed persons engaged in the formal sector among all the self-employed persons

0.50

There were also two alternative scenarios, namely

  • that with the older age of retirement as it is stipulated by Law No. 1485-XV, dated 22d November 2002, as well as with the age of retirement of 65 years, equal for men and women, and
  • that with indexing of an average monthly insured income for inflation and for the wage growth rate.

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