Moldovan government approves draft law on pension system reform

Chisinau, 5 December /MOLDPRES/ - The cabinet of ministers today approved a draft law on amendment and completion of legislative acts on the pension system’s reform. The document sees a new formula of pension’s calculation, ensuring a fair, financially stable pension system, as well as the increase in the retirement age and unification of the way the state social insurances pensions are calculated for some categories of citizens.

Under the draft, decision-makers will carry out the unification of the way the state social insurances pensions are calculated for some categories of citizens, MPs, government members, civil servants, local authorities, judges, prosecutors and exclusion of the “special length of pensionable service” from the public system of social insurances, in order to reduce inequities in the system. According to the draft, a maximal pension could not exceed five average monthly salaries on the economy in Moldova.  

Also, the government plans to value the incomes achieved after 1999 at the level of the present incomes. This is, in fact, a re-evaluation of the pensions, which, according to the Labour Ministry, would lead to a 5-25 per cent rise in pensions.   

At the same time, the new law provides for a gradual increase in the retirement age from 57 to 62 years for women and from 62 to 65 years for men, by six months annually, starting from 1 January 2017 till 2026. The Labour Ministry reasons this change by the fact that the rate of demographic ageing has increased from 13.6 in 2005 to 16.2. According to previsions, till 2035, the Moldovans older than 60 years will account for 25 per cent of the population.

Another argument is mass emigration of residents; as a result, the ratio between the tax payers to the system and the pensions’ beneficiaries dropped to 1.2 in 2014, and the situation will continue worsening, given that the number of elderly people increases more quickly than the one of the persons of other age categories. The maximally admissible level, according to international practices, is four tax payers to one pensioner.   

Following a comparable analysis of the retirement system with the countries from the Central and Eastern Europe, the standard retirement age in Moldova is the lower limit for men and more reduced in case of women, the Labour, Social Protection and Family Ministry said.

The government also plans to increase the necessary length of pensionable service from 30 to 33 years for women and from 33 to 36 years for men.

The draft law is to be submitted to parliament for adoption.  

(Reporter V. Bercu, editor L. Alcaza)