The aging tendencies threaten with the collapse of the pension system in the Republic of Moldova. The Moldovans are likely to remain without pensions by 2020, experts Corina Gaibu and Victor Ursu stated in an online debate, IPN reports.
Corina Gaibu noted that even though there is a law on private pension funds in Moldova, no private fund has been created so far. The private pension funds will not work in Moldova because there are a series of traps that limit these in their activity. On the one hand, it is offered the legal possibility of having 15% of the incomes of taxpayers exempted from taxes if these are transferred to a pension fund, but this money is taxed later, when it is collected at the retirement age.
“Also, if the social contributions paid into the state social insurance budget for forming the future pension are exempted from all the taxes, the money that we would transfer to non-state pension funds, which is 15% of the incomes, is exempted from income tax only. This is one of the existing inequities,” stated Corina Gaibu.
Victor Ursu said the discredited reputation of the non-state pension funds also has an impact. He referred to an insurance company that collected money from people and didn’t give it back. Many people are still in litigation.
According to the expert, the public pension system of Moldova is not sustainable from financial viewpoint and from social viewpoint as well. A balance should be found between the budgetary-fiscal and social systems because the average old-age pension in Moldova is the lowest in Europe and covers only 58-60% of the minimum subsistence level.
The participants in the debate moderated by journalist Vlad Bercu also said that the police officers and public servants retire earlier than, for example, the teachers or doctors. Their pensions and the pensions of judges are much higher because the legislation provides that these represent 75% of the salary. The pension calculation formula in the case of other pensioners is less attractive.
In conclusion, the participants in the debate pleaded for reforming the pension system as soon as possible.
