Memov: pension formula should change to more fairly reflect paid contributions

Nikolla Memov, director of the Pension and Disability Insurance Fund of North Macedonia, said that the current method of calculating pensions is one of the main problems identified in the recent period. According to him, this methodology does not sufficiently encourage the regular and full payment of contributions.

Memov said that the system in force does not adequately reflect the real amount of contributions paid by an insured person over the years of work. He added that in some cases there is a lack of motivation to pay contributions based on the actual salary, which directly affects the Fund’s revenues and makes it necessary to draft a new legal solution.

According to the Fund director, the new formula should establish a clear relationship between the contributions paid and the value of the pension, while at the same time guaranteeing the social solidarity role of the state.

The preliminary proposed concept is based on two pillars: the economic one and the social solidarity one. The economic part would calculate the total contributions paid during the entire period of work, while the social component would provide additional support for people who meet the conditions but do not manage to have sufficient means for a pension above a minimum social level.

“The total amount that the insured person has paid into the system must be taken into account, this amount should be revalued and the payments made should be reflected in the final value of the pension. In this way, a distinction would be made between someone who contributed for 15 years and someone who paid for 40 years, as well as between contributions paid on a low or high salary,” Memov said. /Telegrafi/