Pensioners in Belarus will have the opportunity to significantly increase their pension amount

At the same time, the President emphasized that the state always moves towards increasing pensions if such an opportunity exists. "Yes, our pensions, one might say, are not sky-high, not large, and for certain categories, of course, they leave something to be desired. But we always say and will continue to say to both pensioners and working people: if there is money, we will not offend pensioners. This is a strategic line that we adhere to," said the head of state. "I recently told the Prime Minister – this is an answer to all those who are currently pressuring enterprise management and civil servants, and the authorities: 'Increase salaries!'. To this, we can answer directly: go to the enterprises and earn that salary. But ahead of us is labor productivity. If there is an increase in labor productivity, then please, increase salaries." "No one will print money to pay salaries. Otherwise, we will repeat the financial crisis we had last year," emphasized Alexander Lukashenko. The pension system needs to be improved by offering citizens an option that would encourage them to claim their pensions later. "We need to incentivize pensioners, we need to give them some percentage increase to their pension if they apply for it after reaching the pensionable age," said the President. "Significantly incentivize, so that it is substantial." At the same time, the head of state specifically drew attention to the fact that this should be a voluntary decision of citizens. "We must do this without pressuring people and without artificially or administratively raising the pensionable age. This cannot be done. If a person does not want to apply for a pension later, they should have the right to retire as it is currently implemented – at 55 for women and 60 for men. That is, we must offer an alternative option," the President noted. "But there should be no populism here," warned Alexander Lukashenko. "If we take steps, they should not worsen the financial situation. Simply put, so that we have enough money for it." "There is no need to spare anything for pensioners. Pensions, inevitably, must be raised. And our economy is developing in such a way that we can increase pensions a couple of times this year, as we plan. And this must be done," said the President.As reported by the Minister of Labour and Social Protection, Marianna Shchyotkina, in recent years, the average old-age labour pension in Belarus has been 40% of the country's average wage, which is higher than the corresponding indicator in some developed countries. "This is a recommendation of the International Labour Organization, and it is enshrined in the Concept of National Security," she said. Annual pension expenditure accounts for about 10% of GDP. This also corresponds to the level of a number of Western European countries. "However, what truly concerns us today is the increasing burden on the Population Social Protection Fund," noted Marianna Shchyotkina. According to estimates by the Ministry of Labour and Social Protection, in 2012, there will be 57 pensioners per 100 working individuals. By 2015, this number will increase to 60, and in 2020, it will reach 67 people. "This means we need to solve two problems. The first is to enable people to earn a higher pension. And the second is to attract them to the labour market, as they are highly skilled specialists, and the country needs them. Therefore, it is natural that today such an option is proposed where a person makes their own choice, independently makes a decision," said the minister. The government has prepared proposals aimed at more actively stimulating voluntary deferral of pension claims. To make such deferral more sought after, the pension increase is intended to be more substantial. For the first year, it will be 6% of the earnings used for pension calculation. Over two years, the increase will be 14%, over three years - 24%, over four years - 36%. For the fifth and each subsequent year, a pension increase of 14% of earnings is envisaged, which is cumulative with the percentage increases established for the preceding period. "If today, when calculating a full pension, there is a limited amount – 75% of the earnings from which the pension is calculated – then in this option, there is simply no upper limit. This means a person has the opportunity to earn their own pension amount," noted Marianna Shchyotkina. "We believe that such a provision will also be of interest to those who are currently receiving a pension and can work but are dissatisfied with its amount. They can suspend their pension payments, get a job, and subsequently, their pension amount will increase. The most important thing is that there are no directive measures here, and a person has the right to choose."The Government proposes to include periods of activity during which mandatory insurance contributions to the Social Protection Fund were not paid when calculating earnings for an employment pension. In accordance with the legislation, periods of other activities during which contributions are not paid (military service, full-time education, care for children, Group I disabled persons, and the elderly) are included in the length of service on par with work for which contributions are paid when calculating a pension. Such periods are excluded when determining earnings. "We believe that these measures will be of interest to people. In the future, if there is such a need, we are ready to propose further measures that would stimulate pensioners who wish to continue working," said the Minister. "Correct. We must proceed through dialogue and agreements with pensioners. After all, these people created our country, especially the current pensioners. They must be given the right to choose," noted Alexander Lukashenko. State Secretary of the Security Council Leonid Maltsev also supported the proposed idea. However, he drew attention to whether an employer would want to keep a person of retirement age instead of hiring a young person. In his opinion, it might be necessary to provide a mechanism that would offer pensioners certain guarantees. "In this way, we single out pensioners from the general population as a priority, and push young people away. Here, we already have to compete in the labor market," Alexander Lukashenko remarked on this. "Probably, additional protection is not needed. A person must be a professional. Every employer today keeps a professional. One must learn and maintain one's level, and then there will be no issues," noted Marianna Shchetkina. Deputy Head of the Presidential Administration Andrei Tур drew attention to the fact that the proposed innovations would be particularly beneficial for highly paid workers, which would allow retaining highly qualified personnel in employment. Deputy Prime Minister Anatoly Tozik presented a number of other arguments in favor of voluntarily deferring pension claims. According to statistics, in Belarus, men live an average of 14 years after retirement, and women live 24 years. Thus, if one continues to work for another 5 years without receiving a pension, the subsequent benefit will significantly exceed the financial losses."We should not expect people to extend their working lives by more than 5 years on average. But this will also be a great achievement, and people will live longer. Because retirement is stressful. It means less physical activity, and when a person is inactive, their body weakens," the Head of State believes. "We are not applying any administrative measures here. But people must understand that we cannot infinitely increase pensions. We can only allocate the money we have, as we have always done." Minister of Finance Andrei Kharkovets noted that it is necessary to look at the situation more broadly in the context of the demographic situation that will develop in the future. "Closer to the 2020s, the proportion of the population over 60 will significantly increase, and consequently, the burden on the state in terms of pension provision will grow. Foreseeing the deterioration of the situation in the future, we must think today and shape our behaviour, model it, on how we will act during that period," he said. According to the Minister of Finance, alternative ways of developing self-sufficiency for pensioners need to be sought. One of them is the insurance pension system, where a person additionally pays contributions from their salary and receives supplementary payments upon reaching retirement age. There are successful examples of such a system operating in global practice, but in Belarus, this instrument has not been widely developed for a number of reasons. As the meeting participants noted, inflation is one of the main restraining factors. In the future, the insurance pension system needs to be developed, but for now, the necessary conditions are not in place. "We will stabilise, and then we will look. We will make proposals to the people, but necessarily with state guarantees, so that there are no such pyramids," emphasised Alexander Lukashenko. "Yes, we must study the experience of other countries, but we must still stand on our own foundation. If this is currently tolerable for the population, let's follow this path. We will also look to the future. But let's define this future in the next five-year plan; we will work as promised in this one.""I believe life has pushed us towards what we are discussing, and we already have certain experience. This experience is not only from Western countries but also from former socialist states, with which we can draw comparisons. This experience is also important for us. It is good that, having preserved our pension system, which is understandable to people, we are fulfilling our obligations within it. This is a significant achievement. Therefore, there is no need to break it, and pensioners must not be offended under any circumstances. But we must be honest with them. If people see that we have money, the economy is working, and we can help them with something by increasing their pensions, we must do so," noted Alexander Lukashenko. "But pensioners must understand: if we maintain a low retirement age, then pensions will not be sky-high – people do not want this for now. We promised that we would not touch the retirement age at the moment. Therefore, we are choosing an alternative, but not through administrative means." -0-

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