Democrats propose new pension indexation system

The Party of Democrats proposes a new pension indexation system. According to MP Adrian Candu, if this bill is adopted pension system inequity may disappear, and in 6-7 years the pension will rise to cover the minimum wage for a pensioner, reports Info-Prim Neo. The PDM proposes a different indexing coefficient. According to the bill, for pensions lower than 1,500 lei a coefficient based on the annual increase of the price level will be indexed, plus 50% of the annual national salary growth. Pensions higher than 1500 would be indexed at a rate that covers 100% of inflation. “The pension system in Moldova is what it is, and the Party of Democrats, which considers itself a social Party, wants to change it”, stated MP Adrian Candu at a press conference. According to the Parliament, as a result of the 9.6% index on pension this year, people with small pensions, such as those in agriculture, had a meager addition of 75.3 lei to their 784 lei pension, whereas those who receive 4,000 lei had an addition of 384 lei. “This formula generates inequity between social layers. Those with small pensions notice a very small increase relative to their purchasing power”, Candu explained. Valentina Stratan, member of the Parliament’s Social Protection, Health and Family Commission, claims that, as early as 1998, the Parliament adopted a strategy of pension system reform, in order to eliminate advantaged categories. “If it would’ve happened, I think we wouldn’t have had so many citizens with measly pensions. Nowadays, 1.3 taxpayer provide for one pensioner, whereas normally it should be 3-4 taxpayers per pensioner”, Stratan pointed out. The bill proposed by the PDM would be effective starting 2013, if it is accepted, and the funds necessary to cover the increase will be provided by next year’s State Budget Law and Law on Social Insurance Budget. “Most of the Parliamentary commissions have already given their consent for supporting this bill during the next Parliamentary session, but we hope that we will be understood and supported by all the members of the European Integration Alliance. We are preparing something new for autumn; we are almost finished with a bill which proposes tax consolidation in agriculture”, mentioned Adrian Candu. Over 650,000 people receive pensions, having reached retirement age. The average pension is of 900 lei, whereas the minimum wage is 1,311 lei.