About the project

The launch of the pension reform in the Republic of Moldova was marked by the adoption of the Law no.156-XIV from October 14, 1998 on the state social insurance pensions, which came into force on January 1, 1999.

This Law envisages the preservation in the Republic of Moldova of one-level distributive pension system. For the record of pension rights, gained beginning with January 1, 1999, a new pension formula, directly relating the paid individual contributions to the size of future pensions, has been introduced. Additionally, the transition formula has been introduced; it combines the pension rights, gained before the reform, and rights, gained in the new system. Simultaneously, the process of gradual renunciation from many pension privileges, as well as phased increase of the retirement age and length of insured service, required for old-age pension granting, has started. In 2003 the legislation envisaged the rates of annual pension indexation by an average value between the consumer cost indices and average wage in the country for the previous year.

The pension system is integrated deeply in the national economy and its progress (failures) influences the level of financial insurance of pensioners, as well as determines mainly the parameters of current and perspective socio-economic situation in the country and has a considerable impact on macroeconomic situation on the whole.

At the beginning of pension reform the Ministry of Social Protection, Family and Child of the Republic of Moldova considered necessary the realization of periodic and reliable socio-economic calculations and forecasts, which shall ensure the required quality of practical activities in the framework of pension reform, form the basis of further improvement of pension legislation and drafting of new regulatory and legal acts. The forecast calculations are also necessary for the selection of optimal decisions, ensuring the vitality and stability of pension system, operative response to demographic and socio-economic changes in the country, efficient use of financial resources and ensuring the fulfillment of obligations towards pensioners.

At the first stages of pension reform for the modeling of pension system scenarios, various “universal” models with the involvement of foreign experts were used. However, it is to be mentioned that none of these models could meet the requirements of the specialists in pension insurance of the Republic of Moldova. The standard models were adapted hardly to the specifics of pension system of the Republic of Moldova. Besides, the considerable limitations in relation to the existing statistic information, available for users, came often into conflict with the requirements of the standard models related to the use of incoming data.

This condition determined the Ministry of Social Protection, Family and Child of the Republic of Moldova, supported by the World Bank, to proceed to the implementation of the project, aimed at developing a system of imitational models of the state pension insurance system of the Republic of Moldova. It is to be mentioned that in 2004 the bidding for the development of the appropriate set of applications was won by the Independent Actuarial Information-Analytical Center, having experience in the design of such programs for the Russian pension system. At present the set of applications includes three main models: Analytical model of pension system of the Republic of Moldova, Pension calculator and Middle-term model of pension system of the Republic of Moldova, which are regularly developed and adjusted.
The developed program complex (set) is a modern tool for the actuary monitoring of the implementation of pension reform in the Republic of Moldova, which is necessary, first of all, for the realization of efficient actions for its improvement and development.

In the process of program set operation new requirements appear due to the modification of pension laws and external conditions, predetermining new tasks. New requirements are also made by the developing pension system of the Republic of Moldova. All this leads to the development and adjustment of the existing program set to the appearing realities. This work is performed in two directions: adjustment of the basic analytical model and creation of additional applications.

The development of additional applications is efficient in case when it is impossible to solve newly appeared issues by means of existing applications. An example could be the analysis of the efficiency of the implementation in the Republic of Moldova of conditional-cumulative pension system, development of non-governmental (additional) pension insurance system, including creation of corporative pension system etc.

It is to be mentioned that the development and improvement of the above-mentioned set of applications does not represent an end in itself. This is only a tool for the realization of the actuary expertise of pension system, monitoring of its main parameters. In the Republic of Moldova the developed tools are used actively for their direct destination and certain experience was accumulated in the analysis of the change of socio-economic and financial indices of the national pension system in a long-term perspective by applying the actuary models.