The off-budgetary pension fund under the Ministry of Finance of Uzbekistan has posted for public discussion the draft Uzbekistan’s Pension System Reforming Concept.
The pension system today covers over 3.3 million citizens, which is about 10% of the country's population. There are 2.502 million people who get pensions due to age, 360.3 thousand due to disability, 168.5 thousand for the loss of the bread-winner, and 294.1 thousand as social benefits.
"In the near future, an imbalance of incomes and expenditures of the Pension Fund is expected, which will negatively affect the financing of pensions and other social payments," the document says.
The fund explains this due to the following reasons. the burden in terms of pension payments on the working people has increased in Uzbekistan Ii recent years. According to the population growth forecast for 2018-2025, an increase in the proportion of the population, the number of the retired is expected to grow by 1.2 million people, which, will affect the adequate increase in the expenses of the Pension Fund.
One of the main factors of pension provision is the retirement age. The average retirement age in the world for men and women is 62 years, and in Uzbekistan - 57.5 years (for women - 55, for men - 60 years). In Kazakhstan, Kyrgyzstan and Tajikistan, the age of retirement for men is 63 years, for women 58 years. In Kazakhstan, the retirement age of women will be brought up to 63 years, with a phased increase of 6 months each year. In Turkmenistan, the retirement age is 62 years for men and 57 years for women.
About 60% of the working population, or 10.2 million out of 17 million people, are not covered by state social insurance, that is, they do not make mandatory social payments in the Pension Fund.
Significant amounts are spent on the payment of privileged pensions, the draft says. Their share is 592.4 thousand, or 19.5% of all types of pensions and 23.7% of pensions by age. The average size of privileged pensions is much higher than the average size of pensions by age, or543.2 thousand soums and may exceed 1 million soums.
In Uzbekistan pensions are assigned to those who have at least 7 years of work experience and who make a minimum contribution to the formation of the Pension Fund's incomes. At the same time, according to the Convention of the International Labor Organization On Social Security Minimum Standards, the minimum required length of service for an old-age pension should be 15 years. In many countries, including the CIS countries, the minimum required length of service is brought to the level of 10-15 years.
In view of the foregoing, the Uzbekistan’s Pension System Reforming Concept provides for the following provisions.
In an aim to enhance social justice and efficiency of the pension system:
- grant all working pensioners the right to get pensions in full;
- increase the amount of pensions paid to single pensioners living in care homes for elderly and disabled;
- to introduce allowances in fixed amounts to persons with a III group disability.
Iintroducing incentives and enhance the relationship between size of pension and labor contribution:
- increase pensions by 2% of the average monthly earnings for each full year of work experience in excess of 35 years;
- increase pensions for women who are eligible for retirement at 54 but who retired after the generally established age;
- increase the average monthly wage received for the calculation of pensions from 8-fold to 12-fold the minimum wage established by the legislation on the date from which the pension is assigned.
Ensuring the equivalence of financial participation of generations:
- increase the minimum required length of service (7 years) to be able to grant a pension by age;
- step-by-step increase of the retirement age with bringing to the world average level.
Improving the regulatory framework:
- to develop and approve a new version of the State Pension Provision to Citizens Law, providing for more norms of direct action, simplified and transparent mechanisms for calculating pensions, taking into account the use of modern information and communication technologies, as well as specific incentive mechanisms, including cumulative and termination of practice providing unreasonable benefits and additional payments.
Introduction of information and communication technologies in the pension system:
- active introduction of modern information and communication technologies in the sphere of pension provision, modernization of the "Pension" software package, which allows excluding the stereotypes of paperwork that lead to queues and, as a result, to facts of corruption and bureaucracy. When calculating the pension for the base, personalized records will be taken of calculating the insurance premiums of citizens, formed from 2015.
