Mew pension indexing proposal from PDM is unacceptable, expert

The bill on the amendment of the pension indexation system, proposed by the Moldovan Democratic Party (PDM), doesn't correspond to the principles of uniqueness, equality and solidarity guaranteed by the State, and contains flawed calculations. This is the opinion of Maria Creminscaia, financial and socio-economic expert at the Moldovan National Trade Unions Confederation (CNSM), reports Info-Prim Neo, quoting a communique from the CNSM. “If the Democrats’ initiative is applied, it will violate the principle of uniqueness of the public system guaranteed by the state, which warrants to all participants to the public system – contributors and beneficiaries – non-discriminatory treatment regarding their rights and obligations, as stipulated by the Law”, stated Maria Creminscaia. According to the expert, the bill’s provisions harm the rights of the insurance policy-holders, who have accumulated higher pensions through paying contributions, and the intention to equal higher-pension beneficiaries to those with smaller pensions will create social inequity and stimulate the “envelope salary” phenomenon. “The only way to improve the situation of people who have a smaller pension is to recalculate their pensions”, added Maria Creminscaia. The communique specifies that the PDM bill stipulates differentiated indexation of pensions. According to the Democrats’ legislative initiative, for pensions smaller than 1,500 lei, an indexing coefficient based on annual consumption price growth, plus 50% of the annual average salary growth. Meanwhile, pensions that are higher than 1500 lei will be indexed with a rate that covers inflation by 100%. According to data from the National Social Insurance Corporation, around 600,000 people, i.e. most of the country’s retirees, have pensions smaller than 1,000 lei, a sum which covers the living wage by about 66%.