Fyadynich: Retirement Age To Be Increased Again For The Sake Of The IMF Money

The government is going to irrevocably fulfill all terms of the IMF.

The International Monetary Fund (IMF) recommends the Belarusian authorities to continue pension reform . One of requirements is to increase a retirement age both for men and women up to 65 years.

Will it resolve the problem with the replenishment of the pension fund?

Paplyka: Pension Reform Cannot Be Taken By Spike

Increase of tax liabilities to the Social Protection Fund may result in deterioration of competitiveness at enterprises. It will significantly decrease of already low pensions, and the majority of pensioners will find themselves below the poverty line. Is the retirement age increase the only way out?

- Yes, it is possible to increase it a little. But this is a temporary measure. After a while, there will be not enough to pay pensions again, economist Uladzimir Paplyka says in an interview to Zautra Tvaye Krainy.

The issue of further reforms, according to the expert, is raised because the pension fund suffers shortage of funds. The population is aging and payments grow every year, the economy is not flourishing and the replenishment of the pension fund drops.

- To resolve the situation and make a break, it has been decided to gradually increase the retirement age: men - up to 63 years, women - 58 years. It reduces payments and pension fund deficit. But the main challenge has not been resolved, the expert notes.

In his opinion, Belarus should implement funded components, when an employed citizen can pay some amount to his account that will be there until his retirement.

However, a funded system can be established, if the Social Protection Fund is in surplus, as this is a long-term project which can last for decades. This idea can be implemented in case if the economy is stable: long-term savings make sense only with low inflation.

So, the development of the financial and stock market is required. And it requires other economic reforms.

- The pension reform is a structural one. It cannot be taken by spike. If the IMF offers a loan, the government will have to take some steps up, Uladzimir Paplyka believes.

Fyadynich: All Mistakes Of The Government Are Fixed By People

Chairman of the Belarusian Trade Union of Radio Electronic Industry (REP) Henadz Fyadynich believes that it is not necessary to increase the retirement age.

- The retirement age increase up to 58 and 63 years respectively was also not mandatory. The authorities, apparently, are ready to perform all IMF terms to get a loan. A monitoring is required to find out the retirement survival ratio after the retirement age increase, he notes.

He also mentions that an average pension now equals to €100.

The expert believes that it should be several times higher.

- A Belarusian should feel himself comfortable after the retirement, he says.

According to him, all mistakes of the government are fixed by people.

- The same situation is with pensions: rather than focus on the economy improvement, they think about the retirement age increase, Henadz Fyadynich stresses.

By the way, the majority of pensioners do not know how their pension is calculated. An employed Belarusian directing only 1% of 35% deductions of his salary does not wonder about the way these funds will be spent. And those who do are not able to trace the entire way.

Hidden settlement system, a large number of laws and bureaucracy do not let Belarusians find out the real amount of his pension.