PM Vasile Tofan pledges state asset sales for pension system reform
Newly sworn-in Prime Minister Vasile Tofan has ruled out raising the retirement age, proposing instead to fund a newly introduced Pillar II pension system through the transparent privatization of underutilized state assets.
Speaking on Pro TV shortly after taking office on Wednesday, Tofan highlighted that Moldova’s current ratio of 1.1 active workers per pensioner is fiscally unsustainable, driving an expanding deficit in the social insurance fund.
Pillar II funded through privatizations
To correct this imbalance without raising the retirement age, the government plans to direct proceeds from public asset auctions straight into citizens' individual pension accounts. This multi-pillar framework will complement state-guaranteed pensions with private individual capital.
The Prime Minister emphasized that funding for Pillar II will not stem from increased social security contribution rates. Instead, the administration will focus on monetizing vast holdings of idle state-owned land, neglected real estate, and inefficient public enterprises.
To overcome public skepticism rooted in historic mismanagements, the government will introduce transparent auction models, including Dutch auctions, starting with small public properties before expanding to larger holdings.
Stock market listings and foreign investment
Looking ahead, the government aims to adopt Romania’s model by requiring major state-owned enterprises to list minority shares on stock exchanges. Tofan noted that capital markets serve as an effective mechanism to enforce corporate transparency and curb unnecessary expenditure.
Alongside domestic capital reforms, attracting foreign direct investment (FDI) remains a central economic priority. Tofan targeted annual FDI inflows equal to 10% of GDP—approximately €2 billion (approx. 39.2 billion MDL)—to ensure consistent economic growth rates of 4% to 5%.
The cabinet led by Vasile Tofan officially assumed office on Wednesday, July 22, taking the oath of office before President Maia Sandu and Speaker of Parliament Igor Grosu following a parliamentary vote of confidence on July 21.
Translation by Iurie Tataru
