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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

3.2. Social insurance contributions and taxable basis

It is to be mentioned that in the Republic of Moldova there is a quite complicated system of social insurance contributions. Firstly, the size of insurance tariff is differentiated by categories of payers: employers, hired workers and self-employed (natural persons – owners of agricultural lands, lessees of these lands, individual entrepreneurs and founders of individual firms, owners of entrepreneurship patents, lawyers, notaries, persons who have signed an individual contract etc.). From 2005 the law stipulates as a special category of payers of social insurance contributions the employers from agricultural sphere, paying insurance contributions for the persons, working under an individual labor contract, other contract for provision of works and services in relation to the industrial processing of agricultural production.

The tariffs of insurance contributions are differentiated by various categories of payers and their sizes are approved annually by the Parliament. For example, for employers paying contributions for hired agricultural workers lower tariffs are established: in 2004 – 17,6%, 2005 – 16,9% and in 2006 – 16,0% against 24%, 23,5% and 23,0%, correspondingly, established for the employers paying contributions for hired workers in other branches of economy.

Secondly, the taxable basis from which the insurance contributions are paid differs considerably for various categories of payers of social insurance contributions. So all employers and payers of the mandatory social insurance contributions calculate and pay contributions out of the amount of calculated wage and other payments. However, the size of wage from which the individual contributions are paid is limited to three average monthly wages in economy.

It is to be mentioned that the reform of the Moldovan pension system envisages gradual transfer of the burden of payment of insurance contributions from the employers to the workers. It is supposed that “annually the size of employers’ contributions shall decrease by 1%, while the size of individual contributions shall grow by 1%1”. In fact if in 2004 the individual contributions constituted 1%, in 2005 – 2% and in 2006 – 3%. The Law on the state social insurance budget for 2007 envisages the increase of the size of individual contributions by 4%.

Thus, if the situation of the employers and hired workers payments is clear, the situation related to the payments of other categories of payers is quite complicated. First of all, this is related to the agricultural workers. Land owners, cultivating their lands independently and lessees of the agricultural lands paid insurance contributions depending on the area of the land parcel and its growth class: in 2004 this payment constituted 1,7 lei per 1 grade/hectare. At the same time the natural persons – land lessees, except those who had paid contributions according to other tariff, paid insurance contributions in the form of fixed payments. In 2005 the grade/hectare system was preserved. From 2006 for this category of payers of insurance contributions a fixed payment in amount of 480 lei per year was established. This payment grants the right to minimal pension and burial allowance. In 2007 the amount of fixed payment has increased up to 576 lei.

Besides lessees of agricultural lands a fixed contribution to the pension system was paid by the persons working under a contract abroad, as well as who have signed individual insurance contracts. For some categories of self-employed (lawyers, notaries, founders of individual firms) the basis for calculation of insurance contributions represented the amount of incomes. From 2005 the individual entrepreneurs and founders of individual firms, owners of entrepreneurship patents, as well as private licensed lawyers and notaries pay contributions in the form of fixed payments. From 2007 they are combined in one category of payers with one insurance tariff in amount of 2318 lei.

The complicated system of social insurance contributions generates many problems. First of all, they are related to the agricultural sector. Lower tariff of insurance contributions, established for hired workers in the agricultural sector, as well as intricate contributions system for the owners of agricultural lands combined with low collection rate leads to a serious redistribution of pension funds in favor of pensioners out of the number of agricultural workers. So according to the data of the Ministry of Labor and Social Protection of the Republic of Moldova in 2005 the agricultural workers paid to the social insurance budget 7,9% of their revenues, but instead benefited by pensions and allowances in amount of over 40% of all revenues2.

Realizing that this situation could not last permanently, the Moldovan social insurance policy envisages that the majority of tariffs of social insurance contributions be reduced to two tariffs, namely: general percent from wages fund or other rewards (gained income) or fixed tariff in all other cases.



1. Annual social report for 2003of the Ministry of Labor and Social Protection, page 56.

2. Annual social report for 2003of the Ministry of Labor and Social Protection, page 49.


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