Moldovan PM starts pension system's reformatioin process

Chisinau, 3 August /MOLDPRES/ - Prime Minister Pavel Filip has signed a decision approving the concept of reforming the current pension system, -  a comprehensive process of change, which will put emphasis on social justice, the government's communication and media relations department has reported.

The prime minister had a string of consultations with members of a working group for drafting the pension system reform in Moldova. The group is made up of representatives of the Ministry of Labour, Social Protection and Family, National Social Insurance House, employers' organizations, trade unions, development partners, associative sector and experts in the field.

Prime Minister Pavel Filip demanded that the Ministry of Labour, Social Protection and Family continues consultations, proceeding from the concerned concept and develops, along with social and development partners, as well as with specialists in the field, legislation needed for reform, so that it can enter into force on 1 January 2017.

At the same time, the PM asked the working group that, under the new legislation, due to be developed, citizens's right to a decent living in old age should be guaranteed and the social inequalities between different categories of pension beneficiaries should be excluded.

"We have started important reforms for Moldeova in more sectors in the past six months. Most are contained in the Roadmap. Yet, we must take into account that these reforms must be affordable and fair, especially for socially vulnerable categories. We do not do experiments on people, but good laws for the people ", said Prime Minister Pavel Filip.

The concept of reform of the pension system provides, inter alia, for the reduction of inequities in the pension system and adhering to the principles of social insurance, creation of an attractive pension system, with an enhanced level of benefits, ensuring a transparent government and with strengthened capacities of pension system's management.

Following this analysis, the working group identified three major problems: inequity in setting the pension for different categories of citizens, low benefits and the fact that the pension system is not sustainable.

According to specialists, if the pension system is not reformed, the gap between people's earnings and their pensions will increase.

The pension level for all citizens, regardless of their status, must match the contributions paid. The Working Group considered that the it was not fair if the pension of some categories accounts for 75% of the average salary, while for the vast majority of pensioners this replacement rate is three times lower, only 26% of the average wage.

As the reforms and budgetary capacities allow this, retirees' benefits are proposed to be increased not only by annual indexation, but also by establishing valuing of the insured income, with recalculation of pensions and concomitant establishment of the basic pension.

All these goals can be achieved by ensuring the functioning of a sustainable pension system, primarily in financial terms. Thus, conditions are to be created to increase the number of taxpayers and broaden the tax base, including by combating payment of salaries in envelopes.

According to statistics, there are 679.877 pensioners in Moldova.

(Editor M. Jantovan)