Statistics show that about 25% of the able to work population of the Republic of Moldova is abroad. President of the National House of Social Insurance Laura Grecu, in an interview for IPN, said labor migration led to a decrease in the number of insured persons and this negatively affected the financial viability of the social insurance system.
Laura Grecu noted that the pace of contribution collection is now much lower than the growth rate of the social welfare costs and this causes considerable disproportions. Respectively, the deficit of the social insurance budget is covered with state budget funds (1.34 billion lei). The sustainability of the pension system is influenced by the number of active people and that of employed people, which rose by 1.5% and 3.3% respectively, while the total number of pensioners increased by 3.1%, while the costs associated with pension payment by 16.9%. Thus, the ratio of taxpayers to pensioners is 1.24 (persons involved in the pension system total 846,000 or 70.3% of the employed population that takes part in the state social insurance system).
Another problem is related to the underground economy, which is estimated to represent 30%-40%, and the serious consequences of this phenomenon are felt not only in the social insurance system, but also in other social spheres. Recent polls show that almost 33% of the active population of Moldova worked illegally at the main workplace in 2014. The cases of informal employment are most frequent at agricultural companies, where more than 70% of the employees receive salaries ‘in envelope’.
According to Laura Grecu, as of April 1, 2017, a new pension calculation formula will be used instead of the current calculation method, which is considered very complicated and is not understood by the people and necessitates the collection of a number of justifying documents (salary certificates, extracts from orders, etc.). The new formula will ensure interdependence between the paid social contributions and the size of the future pension. The new formula is transparent and can be easily managed. Also, the persons will confirm only the insurance period until January 1, 1999 and will not need to present salary certificates and other documents. We also plan to provide an online pension calculator for payers of social contributions, which will enable the person to calculate the future pension with approximation.
