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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

8.2. Base Macroeconomic Forecast

Since Moldova has not got an official long-term (up to 2050) macroeconomic forecast we were developing a base macroeconomic forecast necessary for the pension system simulation with making use of the above-mentioned short-term economic projections made by the Government, as well as of the international experience.

Wage growth rates are the fundamental macroeconomic indicator within the simulation model of the Moldova’s pension system; they predetermine the flow of contributions to the pension system. However they cannot be set directly for in this case some derivative macroeconomic indicators (such as rates of GDP growth, share of annual wage-bill in GDP, etc.) may gain unrealistic values. This outcome is probable since these indicators are functionally related with the wage growth rates through relevant labour market indicators which are autonomously computed in the model on the basis of the demographic forecast. For this reason when developing the macroeconomic forecast we selected three indicators, listed below, as scenario parameters:

  1. average annual consumer price index (CHI),
  2. share of the annual wage-bill (AWB) in the gross domestic product (GDP), and
  3. real rates of GDP growth.

Let us make a note that these indicators allows to adjust wage growth rates with basic demographic indices of the country’s population and they may gain sound values taken from long-term tendencies observed in the world economy. Fig. 8.3 displays base scenario values of these parameters in the period of up to 2050. When drawing this scenario up we supposed that in the near-term outlook the Moldova’s economy would be developing in conformity with the official macroeconomic forecast (Table 8.1), and in the long-term outlook it would overcome after-effects of the late 1990s economic crisis with its basic macroeconomic indicators gradually approximating to the relevant indicators of developed countries. In this way the GDP growth rate and inflation rate for 2050 are projected as 2.5 and 2 %, correspondingly.

Fig. 8.3: Scenario parameters of the macroeconomic forecast

Fig. 8.4 depicts values of derivative macroeconomic indicators, including real wage growth rates and productivity growth rates calculated according to algorithms designed in the model (see paragraph 9.4). Table 8.3 shows values of basic scenario and derivative macroeconomic indicators.

Fig. 8.4: Macroeconomic forecast

Table 8.3: Scenario parameters of the macroeconomic forecast

Year

Average annual CPI

Share of AWB in GDP

Real GDP growth rates

Real wage growth rates

Productivity growth rates

2003

11.60

-

8.44

0.00

22.92

2004

12.40

26.88

7.30

10.26

7.14

2005

10.00

28.38

6.00

14.05

6.69

2010

6.60

34.12

4.98

8.03

5.58

2015

5.40

37.15

4.71

6.56

5.12

2020

4.10

38.99

4.26

5.24

4.47

2025

3.64

39.91

3.70

4.09

3.77

2030

3.23

40.19

3.12

3.21

3.16

2035

2.86

40.18

2.60

2.75

2.73

2040

2.54

40.23

2.23

2.57

2.55

2045

2.25

40.28

2.10

2.72

2.69

2050

2.00

40.33

2.02

3.00

2.97



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