The birth rate is falling, and the average age of older people is growing - this is a global trend. The total number of workers is declining, while the number of pensioners is growing steadily. Of course, one can rejoice at the increase in life expectancy, because this is an indicator of its high level, but the ratio of people of working age and pensioners creates a high social and pension burden on society and worsens the situation in the economy and aggravates relations in the social sphere.
Most countries have to deal with this problem in several ways, including increasing the age of retirement. The same reforms have been proclaimed in recent years in the Republic of Belarus. The retirement age in Belarus rises in stages.
Demographic breakthrough
Like most countries that were once part of the USSR, Belarus is in a difficult demographic situation. In the second half of the twentieth century, the birth rate at first began to slow down, and then completely decreased. The collapse of the USSR only worsened the situation. And the efforts of the new state in the person of the Ministry of Labor of the Republic of Belarus did not play a special role. Fertility has been falling and is still falling, which leads to a decrease in the number of working population. Despite some successes, the situation is getting worse; the death toll is still higher than the birth rate.
The growth in the number of pensioners
The retirement age in Belarus at the beginning of 2017 was 60.5 years for men and 55.5 for women. Of the population of just under ten million, retirees accounted for a quarter. And the ratio of working to older people was even worse. According to the Ministry of Labor and Social Protection, there are 61 pensioners per 100 workers in the republic. The Ministry of Labor of the Republic of Belarus and statistics argue that the trend is such that over the next fifteen years the number of elderly people in the general structure of society will increase in both absolute and relative numbers.
The ratio between the number of people of working age and pensioners is getting worse. There are fewer working people, more pensioners. This is the new reality, and both the state and the population are forced to adapt to it.
The legislation of the Republic of Belarus - the legacy of the Soviet era - clearly does not correspond to the modern period. The number of elderly people today is steadily increasing, and the amount of money that the state can allocate to support such segments of the population is decreasing.
The government openly agreed that the ongoing pension reforms are forced actions. This is due to the fact that funds for the maintenance of pensioners are sorely lacking.
Pension Fund
In recent years, the number of pensioners has been constantly growing, and it is necessary to scoop up finances from pension funds more and more intensively. The government warned that, leaving the previous system of labor pensions in Belarus in the near future, it would be necessary to increase payments to pension organizations of people of working age and / or reduce the amount of pensions themselves. After a decade and a half, pension expenses would have risen by about one fifth.
To some extent, the position of the state was correct. In addition, one cannot ignore much better living conditions (than, for example, in the fifties) and the achievements of modern medicine. If in the middle of the twentieth century the state of citizens to retire was weak and mortality was high, then by now the situation has changed significantly. The retirement age in Belarus has remained the same, and the number of older people living in old age of 70 or 80 has increased.
Income and expenses
Pension pressure on the state is constantly increasing. According to official data, at the beginning of 2017, pension hardships in the country reached about 9% of GDP. 2619.3 thousand pensioners live in Belarus, of which over half a million, as before, are working.
Meanwhile, since the end of the winter of this year, the amount of the living wage has increased, and in connection with this, the costs of issuing minimum labor and social pensions have also increased. Such a situation could not continue. To reduce financial pressure on the pension structure, it is necessary to gradually increase the retirement age.
Global trend
At one time, the Ministry of Labor of the Republic of Belarus expressed the idea that since the beginning of the twenty-first century many countries have been constantly increasing the number of years for retirement in order to reduce pension pressure on the economy. Meanwhile, in Belarus, the increase in the retirement age in 2017 will occur for the first time since the country's inception and will make it possible to approach the global average level.
In the overwhelming majority of states, in our time, the retirement age is 60-65 years, and often it is common for both men and women. In Belarus, men have the right to retire five years later than women, while men, according to statistics, live less. An increase in the retirement age in Belarus will occur for both sexes.
European countries and the United States of America plan to raise the retirement age to 70 years by 2060, and Germany intends to carry out appropriate reforms in the near future. Today the highest retirement age is in Finland (62-68 years for both men and women), Sweden (61-67 years old at the moment, but the Prime Minister is actively advocating raising the retirement age to 75 years), Poland (65 -67 years), Iceland (67 years), Denmark (65-67), Israel (67 years), Germany (65-67).
Presidential decree
On the basis of the decree of the President of the Republic of Belarus, over the next six years (from 2017 to 2022) major transformations in the pension sector will take place. Every year, starting in January 2017, the retirement age will increase by six months. By the beginning of 2022, the retirement age will reach 58 years for women and 63 for men. In addition, the minimum length of service required to retire by age will increase annually for six months (in aggregate, it will also increase by five years).
Reform goal
The aforementioned decree launched the pension reform mechanism, which will make it possible to leave spending on pensions at the current year level for at least the next 5-8 years. The legislation of the Republic of Belarus will be restructured in such a way that it meets the new realities and contributes to the development of the social sphere, as well as reducing the burden on the economy.
Reform progress
So, the retirement age will increase in stages. Every six months, the retirement age will increase by the same six months. Earlier, the government proposed another option: increasing the retirement age by one year annually. In the end, they chose the option with a gradual increase in age.
The Ministry of Labor and Social Protection explains that in view of the recent reforms, men who were born in the first half of 1957 and women in the first half of 1962 will be the first to experience the transformation of the pension system. Under previous laws, they could retire at 60 and 55 years, respectively, i.e., in the first months of 2017. But since the retirement age in Belarus has been increasing by six months since 2017, residents of the country whose birth dates are within the specified chronological frames will have to work another 6 months and will receive a pension in the second half of 2017.
Consequences of Pension Reform
The reform, aimed at increasing the retirement age, will directly affect about 100 thousand people in Belarus in the near future, half of whom will be retired six months later, half - for a year. In accordance with the decree of the President of Belarus, in the next six years, the age at which it is possible to receive labor pensions will increase by three years.
The IMF believes ...
Meanwhile, the International Monetary Fund, one of the largest financial institutions, proposes raising the retirement age in Belarus even after the reform in 2022 was completed. A recent message from the organization, which was transferred two weeks ago, states that Belarus must first make a soft increase in the age for reaching retirement for men and women under 65 years old. After you need to tie the retirement age to average life expectancy.
In general, statements made by the IMF indicate that the likelihood of such a scenario is very high. The IMF says that the ratio of pensioners to able-bodied residents will increase and by the middle of the century will reach the fact that two-thirds of the population will be elderly citizens.
An increase in the number of pensioners will lead, according to IMF experts, that the amount of pension payments in Belarus will almost double by the middle of the century. As a result, the budget deficit will grow by about three times, the economy will react negatively to this state of affairs.
What's next?
The Ministry of Labor and Social Protection of the Republic of Belarus also predicts an increase in pension expenditures in the state due to the constant aging of the bulk of the population, and an increase in the number of pensioners. So, according to experts of the Belarusian Economic Research and Education Center, if in 2013 the allocation of funds to the pension fund reached approximately 9% of Belarus’s GDP, then by the middle of the century it would already be 20% of GDP. Consequently, if nothing is changed in the pension system in the future and the retirement age is not increased, considering the reforms carried out as sufficient, the lack of PF funds in Belarus, due to aging of most people, will be guaranteed.
This problem, to a greater or lesser extent, applies to other countries, so such transformations will affect them. Raising the retirement age in Belarus is only one of the steps. A similar reform has already started in Russia and Ukraine, in turn are other post-Soviet countries and Europe.