48-year old Victor Codreanu once lost sleep thinking about how he would manage after retirement. But now his concerns have nearly vanished. "Even though retirement is still is a long way away, I do not worry because I know exactly what my pension will be, if I keep my current job and salary level," says Victor, who works in a factory in Ialoveni town.

Like Victor, most of Moldova’s population now benefits from a reformed social protection system. The reformed system has been supported in large part by the World Bank’s Social Protection Management Project, which was launched six years ago.

The situation was very different in the mid-1990s. The social insurance system from the pre-transition period could not ensure protection for the people of Moldova, and the elderly and poor were among the most vulnerable. Among other things, the system suffered from a poor political framework, a weak administrative capacity, and a lack of understanding by society. The country’s overarching economic challenges further undermined the system’s durability.

In 1998, things began to change. That year, with the assistance of the World Bank and European Union, Moldova’s long-term pension strategy was finalized and a new law on state social insurance pensions was adopted, establishing a correlation between social contributions and pension size.

And in 1999, Moldova asked the World Bank for support in implementing comprehensive reforms of the public pension system and designing a new organizational structure for social insurance. The project included analysis, monitoring and evaluation of social policies; strengthening of social protection management by creating and implementing an integrated information system; and better public information.

As a result of the project, the capacity of staff in the Ministry of Labor and Social Protection has been increased considerably through training. Social protection policies are evaluated regularly, social reports are published yearly, and the Moldovan people are well informed about reforms through public information campaigns that utilize brochures, radio and television programs, public service announcements, and newspaper articles to spread the word.

The organizational structure of the National Social Insurance House (CNAS) was improved, taking into account international best practice examples, and staff have been trained accordingly. Both the central office and local offices of CNAS have been furnished with equipment, including calculators, printers, and photocopiers, to ensure that individual records of social insurance contributions are kept, and many offices have been renovated. Communications and internet networks have also been installed.

Victor Codreanu has benefited greatly from these improvements. At his local Social Insurance House—upgraded with support of the World Bank—Victor was able to learn in-depth about his rights and responsibilities, social policies, social protection system and retirement conditions. He has met with well-trained employees of the Territorial House, who have been instructed in personalized recording and management. Victor and others visiting the Territorial Social Insurance House can acquaint themselves with the social reports that are published annually, and can read brochures about the reforms that have been implemented. In addition, for two years Victor has had a personal social insurance code so that he can check at his own convenience if his employer has transferred his social contributions.

The results of the project are clear. The number of contributions to the state social insurance budget has increased and the budget income has also risen. Pension arrears have been settled, and pensions are now indexed yearly. Employees can more efficiently monitor the payment of contributions by employers. Public communication regarding social protection policies has also greatly improved, and as a consequence, the population is better informed about the connection between the sums of social contributions transferred and pension size.

General data about the Social Protection Management Project:

Total project cost: USD 14.1 M
International Development Agency credit: USD 11.1 M
Grant Government of Japan: USD 0.5 M
Contribution Government of Moldova: USD 3.0 M
Counterparts: Ministry of Health and Social Protection, National Social Insurance House

Project objectives:

Support implementation of comprehensive reform of the public pension system and support implementation of the new organizational structure for social insurance.

Status: Effective since October 04, 1999. Closing Date: 12/31/06.

Implementing agency: Project Coordination Unit
Head: Ala Scalschi (tel: 72-53-00, 28-76-08)