Moldova pension system strained by low contributor-to-retiree ratio
Moldova’s parliament completed its review of the 2025 social security budget, exposing severe structural vulnerabilities behind a nominal financial surplus.
The National Social Insurance House (CNAS) reported a technical surplus of €6.26 million (approx. 122.8 million MDL), with total revenues reaching €2.51 billion and expenditures at €2.50 billion. However, officials clarified that this surplus represents a technical balance utilized to advance January pensions rather than actual savings.
Structural deficits and state reliance
The audit highlighted that the social security fund remains deeply dependent on the central government. Out of the €1.03 billion transferred from the state budget, €209.18 million was directly required to cover the system's core deficit.
The Court of Accounts revealed that between 2018 and 2025, social budget spending outpaced autonomous revenue growth by 12.7 percentage points. This widening fiscal gap underpins the system's structural instability.
Severe demographic and labor strain
The most alarming metric is Moldova's dependency ratio, which stands at just 1.2 contributors per pensioner. This is three to four times below the recommended European standard of 4 to 5 workers per retiree.
The Ministry of Labor and Social Protection rejected immediate pension age increases. Instead, authorities are targeting the informal economy, noting that detected cases of undocumented labor rose from 80 in 2020 to 8,000 in 2025.
Insolvency losses and benefit denials
Corporate insolvencies heavily penalize the welfare system. At the end of 2025, 1,631 insolvent companies owed €25.48 million to the social security budget, with €1.29 million already written off as unrecoverable.
This financial distress directly impacts citizens. Auditors documented that dozens of employees in bankrupt firms were denied maternity, childcare, or temporary disability benefits due to unpaid corporate contributions.
Regulatory failures in social assistance
The Court of Accounts also raised red flags over widespread non-compliance in welfare distribution. A targeted audit revealed that 42% of checked social benefits—amounting to €540,800 out of a €1.27 million sample—were distributed irregularly.
Compounding these issues, thousands of employers are exploiting part-time contracts to report salaries below the mandatory legal threshold. This practice threatens a broader shift toward service contracts that strip workers of basic labor rights and bypass social contributions.
Long-term outlook
The social security budget accounts for 13.9% of Moldova's GDP, supporting 1.2 million beneficiaries. Without sustained formalization of the labor market, demographic decline and emigration will inevitably increase pressure on state finances.
Parliamentary discussions emphasized that pending legislative frameworks, including the freelance labor law and digital tracking tools like "eZilier", are critical steps toward stabilizing the system.
Translation by Iurie Tataru
