Moldova Is on the Verge of a Demographic Catastrophe: Future Pensioners’ Money at Risk

Businessman Vasile Tofan believes that the main obstacle to the business environment in Moldova is labor force, not war or the cost of assets. The main problem identified by Tofan is that a “prolific” generation is followed by a much smaller generation. The prospect generated by these challenging demographics is that there will be increasing pressure in the future on the younger generation between the ages of 20 and 25, who will have to ensure the sustainability of the pension system and maintain labor productivity levels. However, this may be difficult given the small proportion of this younger generation compared to the previous one. Moldova’s pension system operates on the basis of a joint pension scheme (Pay As You Go). Moldovan workers contribute to the pension fund throughout their lives so that they are guaranteed a state pension at the end of the contribution period. The retirement age in Moldova is 63 years for men and 60 years and six months for women. According to statistics, on average, Moldovans no longer live long enough to receive the money withheld by the state for retirement. Thus, they receive a pension for about 10 years after the cessation of activity. At the beginning of October 2023, there were 675.6 thousand pensioners in Moldova, i.e. 303 less than a year ago. According to CNAS data, the vast majority of pensioners (529.4 thousand people) receive old-age pensions (about 3,680 lei on average), while 99.3 thousand receive disability pensions (2,446 lei). The highest pensions - over 14,631 lei - are received by “certain categories of civil aviation workers” (448 people).