Policy Briefs
On the Necessity of Pension Reform in Belarus
Belarus has a pay-as-you-go pension system that becomes unsustainable with an ageing population. The country has recently finished the process of increasing the retirement age by 3 years to 63 and 58 for men and women, respectively.
This reform is not sufficient for delivering sustainability to the pension system, and further reforms are necessary. We show that the available space for further increasing the retirement age is limited and cannot eliminate deficits. The introduction of a fully-funded component delivers balance and pension gains in the long run but deepens the deficit problem for the first 30 years after its introduction. Reforming the pension system and transitioning to a fully-funded system would be a major policy challenge for Belarus after political change, and possible policy options should be explored now.