Session to discuss development of pension system

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Three scenarios of raising the pension age were submitted to Belarus President Aleksandr Lukashenko for consideration. These were the results of the session held on 10 March to discuss the development of the pension system in Belarus.

The President pointed out that people are actively debating this idea. Everyone would like higher pensions for the sake of proper living standards yet opinions about ways to achieve that goal often differ.

“I am now split between two views. First, the government suggests remodeling the pension system. Various proposals have been voiced including in favor of the Russian model,” noted the head of state. “We are talking about raising the retirement age for now but later on the entire system may be reformed, some parts can be changed or polished. It is one point of view, the view of the government.”

“The general public represents the other point of view. Frankly speaking, according to my data and, I am confident, the data is precise, we have not yet reached a point where an overwhelming majority of the nation supports the government’s proposal to raise the retirement age. We are close to half of that. And people respond to our proposals, to requests albeit slowly but after we explain things to them, they understand what we are talking about. Belarusians are educated people,” said the President.

“I am split between two sets of opinions: the government’s proposals, which are based on economics — and I absolutely agree with them on that — and the nation’s opinion, which I cannot ignore,” stated Aleksandr Lukashenko.

“I’ve been thinking about the problem long and hard and will base my decision on the principle I have always followed: we have to manage the processes going on in the society and economy instead of letting the processes manage us. If the situation is tolerable, we can put up with it. But if it is approaching a threshold we cannot let it go over, we have to make the decisions. We cannot allow these processes to control us because the outcome would have a negative impact in politics, economy, and finance,” believes the Belarusian leader.

“This is why I would like the government to answer the question: have we approached the threshold when we have to decide or is the situation still bearable purely from the economic point of view?” stressed the President.

“It is necessary to attentively and thoroughly consider all the aspects of the matter and work out optimal variants in order to make our pension system reliable and smoothly operating for the benefit of the nation,” added the head of state.

It would only be fair if the retirement age was raised for everyone, Aleksandr Lukashenko believes.

“But we have to bear in mind all the factors: the life expectancy of men and women, peculiarities of rural and urban areas, working conditions in some industries and other factors,” said the head of state.

Life should provide the guidelines for raising the retirement age. Real processes in the demographic situation should be taken into account without worsening the financial standing.

In his words, two factors speak in favor of raising the retirement age. Considerable changes in the structure of the society with the number of working Belarusians decreasing and the number of pensioners constantly rising is the first factor. There are over 60 pensioners per 100 working Belarusians. According to the head of state, the trends will get only worse.

“Second, thanks to our social and economic policy people now live longer. The average life expectancy has increased by five years in comparison with the 1990s. This is why 55-60 years is a normal age,” believes the President.

Aleksandr Lukashenko noted that as far as public opinion polls are concerned, he is surprised by the fact that working Belarusians are okay with raising the retirement age while pensioners are against the measure. “As far as I can understand our ideologists and the government fail to explain things properly. Pensioners need to be told that we don’t want to let things slide to a point when we have to cut pensions!” noted the President. “We cannot allow it. Because the pensions are small as it is. We cannot reduce them even more.” Aleksandr Lukashenko went on saying that the matter had been discussed with President of Russia Vladimir Putin. The Russian president noted that even in Russia if the retirement age is left unchanged, they will have to reduce pensions because the current revenues of the pension fund are barely sufficient.

The President mentioned another aspect of the problem. If the retirement age is raised, it will be necessary to create even more jobs to keep people employed. In his opinion, it would be a good incentive for creating more jobs. The President underlined that this aspect of the problem needs thorough calculations.

The head of state went on saying that if the retirement age has to be raised, it will be done step by step in order to let the nation adapt to the changes.

“I’ve instructed the relevant agencies to poll the public opinion. The results are inconclusive for now. For now all I get is reports two or three pages long about some stages that we need to pass by April, by June, and by August in our campaign to convince the nation. People don’t need any stages. People need to be clearly told about pros and cons,” said the head of state.

“I am not inclined to exaggerate that the entire country will flip over if we raise the retirement age. It will not. I just don’t want to make the decision in a haphazard way and get reproached by the nation,” noted Aleksandr Lukashenko. “Everything should be done carefully. If we say that the person occupies the central place in our policy, we need to listen to the person or convince the person just the way we are doing it.”

The President remarked that not only Belarus but also Russia and Kazakhstan are concerned about the issue of raising the pension age. Aleksandr Lukashenko noted that he has discussed this issue with Russian top-ranking officials several times. “Our positions are absolutely identical! The circumstances compel us to address the pension age issue. The main thing is to decide when to do it,” the Belarusian head of state said. In his words, he agreed with Vladimir Putin that they will try to convince the people of Russia and Belarus; Kazakhstan will also join this process.

The Belarusian head of state remarked that Kazakhstan has already made a step towards rising the pension age. However, this was not the most resolute step, and now it is essential to raise the pension age for the second time.

The President of Belarus said that the pension age in the richest countries is much higher (by five or even ten years) than in Belarus. Aleksandr Lukashenko cited Germany where people retire at the age of 67 as an example. “This is a rich country spending billions on the support of other states, including on the minimization of impact from the inflow of migrants,” the head of state remarked.

Three scenarios of raising the pension age were submitted to Belarus President Aleksandr Lukashenko for consideration. The economic side of these scenarios was considered with the participation of scientists.

In accordance with the first scenario, women are supposed to retire at the age of 60, men at the age of 65. Marianna Shchetkina remarked that this is the most economically feasible scenario.

The second scenario envisages raising the pension age to 60 years for women and 63 years for men.

The third scenario envisages raising the pension age to 58 years for women and 63 years for men.

As for the pace of raising the pension age, it seems that the most optimal way will be to increase it gradually by six months.

The final decision will be taken after extensive discussion.

The head of state stressed it is important to heed to the public opinion, the feedback from people. Only then the final decision will be taken.

This approach can also come in handy for creating more jobs. If the retirement age is raised, a surplus of workforce will be available on the labor market. Those people need new jobs because university graduates and young Belarusians should be able to enjoy their guaranteed first jobs.

In this context, the President gave an instruction to offer more development opportunities to private small and medium enterprises.

The head of state is going to hold another session to discuss this issue and make a final decision in the near future.