25 October 2021, Monday, 19:40
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How They Plan To Increase Retirement Age In Belarus

How They Plan To Increase Retirement Age In Belarus

Officials from the Ministry of Labor are obviously hiding something.

Starting from 2022, the retirement age will increase by six months, as well as the minimum insurance period, which is necessary to receive a labor pension. This is another planned step-by-step increase. We asked the Ministry of Labor if the possibility of further raising the retirement age is being considered, as well as what the situation with the announced funded pension system is.

Will the retirement age be further increased?

In 2022, the retirement age will be 63 for men and 58 for women.

The zerkalo.io journalist, as an individual, asked the Ministry of Labor whether they intend to further increase the retirement age after the end of the current reform and, if so, for which categories of the population.

- This issue is not being considered now, - said Deputy Minister of Labor and Social Protection Valer Kavalkou.

Earlier, officials discussed further raising the retirement age after 2022, but only women were discussed. The IMF also advised to raise the retirement age even more.

“Let's see how in 2022 the pension reform will affect the balancing of the fund,” Labor Minister Iryna Kastsevich said earlier.

To a clarifying question, whether the option to raise the retirement age for women is being discussed, Valer Kavalkou also replied that no, this issue is not being considered.

What is the situation with the announced funded pension system?

We asked the Ministry of Labor how the introduction of the previously announced accumulative pension system according to the 3 + 3 scheme is progressing. Earlier on February 11, Aliaksandr Lukashenka announced at the All-Belarusian People's Assembly about the plans to gradually introduce a funded pension system. Moreover, officials want to do this both at the expense of the employees themselves and the employers: “An employee will be able to transfer up to 3% of their salary to their personal retirement account, and the employer will add the same amount”.

- The question is being worked out. The work in this direction is underway, - said Valer Kavalkou. He did not give other details.

Earlier, Valer Kavalkou said that now we are talking about a voluntary funded pension, and not about mandatory for everyone. He explained that the introduction of the mandatory funded part of the pension system rests on financial aspects.

- If we introduce compulsory savings, we will have to think about introducing an additional tariff. Today, the Social Security Fund is already forced to attract funds from the republican budget to ensure current payments. This 29% today does not cover the cost of paying pensions, so they cannot be spent on savings. Someone will have to recompense this money, and this is again the republican budget. Employers will be extremely against an increase in the additional insurance rate, they already perceive these 28% negatively. Workers are not yet ready for this,” Valer Kavalkou noted earlier.

Belarusian officials have repeatedly spoken about the need to stimulate the country's residents to save for an additional pension themselves, or even make the funded element mandatory for everyone. In 2018, Deputy Minister of Finance Yury Seliverstau (now he holds the post of minister) noted that it would be advisable to reduce the burden of contributions to the Social Security Fund for enterprises and “create tools to stimulate citizens to independently accumulate in the fund.” At the same time, the official noted that people are in no hurry to save on their own for future retirement, because “a series of devaluations undermined confidence in the financial instruments.”