The bill that defines the legal framework for the constitution and functioning of optional pension funds in Moldova was approved by the Government. The document specifies the requirements for the organization and creation of an internal market for the accumulation and offering of optional pensions based on individual capitalized savings in conditions of safety and equal treatment for all participants, IPN reports.

The National Commission for Financial Markets, which drafted the bill, said the optional pension system does not limit the person’s participation depending on age or the size of contribution and adherence to an optional pension system is an individual option. The system will be formed based on voluntary contributions made by salary earners or employers. Each participant will decide the pension fund to which to contribute and the size of contribution by concluding an individual fund joining document.

The bill envisions a new element that is designed to strengthen the relations between the employer and employee materialized through an occupational pension plan. The optional pension funds center mainly on the individual retail component, while the occupational pension funds are based on the corporate component, being constituted on the initiative of the employer that pays contributions for the employees.

Under the bill, a fund for guaranteeing contributions paid into the optional pension system that will be regulated and managed by the National Commission for Financial Markets will be set up to compensate for the losses of the participants and beneficiaries of optional pension funds, if the fund managers cannot cover them.

The bill is to be debated by Parliament.