The International Monetary Fund (IMF) has urged Belarusian authorities to continue the pension reform in order to eliminate the pension gap by 2022.
One of the measures proposed by the experts is a gradual increase of retirement age up to 65 for both men and women.
The option proposed by the IMF is actually the most rigid and wasn’t even considered by the government when it conducted the reform last year.
In 2015 the decision was taken to raise the pension age in Belarus by three years – up to 58 for women and 63 for men. The authorities also considered 60/65 and 60/63, but have opted for the least drastic, or “politically acceptable” as experts called it, option.
The catch is that the effectiveness of the chosen age will run out by 2022. This was pointed out by both independent experts, and the Ministry of Labor and Social Protection. After the adoption of the decree, Alexander Lukashenko stressed that “it is only the first step. And, if necessary, the matter will be looked into again in 5-6 years.” However later the Deputy Minister of Labour and Social Protection Valery Kovalkov added that the issue was not on agenda.
The IMF forecasts that starting 2023 the budget of the pension system will be decreasing by approximately 0.15% of the GDP annually. At present pension payments make about 10% of the country’s GDP.
In addition, because of the low retirement age, Belarus is among the leaders in the number of pensioners, even though it does not belong to “old” European countries.
Among other measures, the IMF experts propose that Belarus should re-index pensions to inflation rather than wage growth in the long term; further limit the practice of early retirement; and introduce measures to stimulate demand for workers of the older age group.