Belarusians To Work Longer And Pensions Decrease
- 2.03.2025, 14:16
Forecast of the economist.
In 25 years, there will be 6 pensioners for every 10 working Belarusians. Economist Leu Lvouski told Euroradio.
In his opinion, if a deep reform is not carried out in the coming years, then in 10-15 years the state will finance pensions only from the budget, and their size will be reduced.
The problem in demographics
The Belarusian pension system operates on a distributive principle: contributions of working citizens are used to pay current pensioners. This scheme was effective when the population was growing. But the situation in Belarus is changing dramatically and not for the first year.
"Now there are 4 pensioners for every 10 employees, and in 25 years there will be 6," explains Lvouski. "This means that the load on workers will increase by one and a half times."
The demographic crisis is exacerbated by growing labor emigration and a decline in the birth rate, which leads to a decrease in people making contributions to the pension fund.
Despite the fact that the problem is not the first decade, the authorities prefer not to discuss it.
"The government claims that there is a surplus in the Social Insurance Fund, but the fund is already partially financed from the state budget," says Lvouski. In 2024, 2 billion rubles were allocated to support the fund.
If this trend continues, then in a few years the pension fund will be fully covered from the budget, and this will adversely affect the amount of pensions.
Understanding this, the government undertakes only cosmetic changes. Thus, the deduction from pensions for working pensioners was canceled.
"This is a good measure, but it only postpones the crisis a little. A maximum of 10,000 people will return to the economy, and this is clearly not enough," explains Lvouski.
The previously introduced additional pension insurance will not save the situation. Now there are about 45,000 people in this system, and their money is invested in non-transparent schemes, the expert emphasizes.
What measures can be taken by the government?
Lvouski believes that the authorities will raise the retirement age for women. It is also possible to involve mothers on maternity leave and people with disabilities in the economy.
But all these are only temporary solutions, the expert emphasizes. This reform should include a transition to a mixed system — a combination of solidary and cumulative principles.
Why is such a pension reform difficult to carry out in the current situation?
It is possible to transfer part of the contributions to savings accounts only at the expense of an external loan, but Belarus currently does not have access to international borrowings. In addition, the population does not have confidence in the authorities, and the accumulated money must be reliably invested.
"Now the state offers people to give up part of their income for the sake of payments in 30-40 years. But in the current political and economic situation, no one believes in the stability of these savings," Lvouski emphasizes.
Reform is inevitable, but when?
It becomes more and more difficult to postpone the reform every year. Ignoring the problem, the authorities will reach a critical point and then the government will have two options: either to sharply increase insurance premiums or to reduce pensions.
"Belarus faces a choice: either prepare for the transition to a new system, or wait until the problem becomes uncontrollable," the expert concludes.