2011年-世界发展银行全球_Fiscal_Projections_for_Pension_System_of_Belarus_19页_816kb

Summary of Fiscal Projections for Pension System of Belarus

Core Content

This document provides an analysis of the fiscal sustainability of Belarus' pension system, focusing on its current structure, demographic challenges, and potential reform options. It highlights the system's reliance on a pay-as-you-go (PAYG) model with a 29% contribution rate on the insured wage bill, and its current relatively stable fiscal performance, with a small surplus of 5%-1% of GDP. However, future projections indicate that the system will face significant financial strain due to demographic changes, including an aging population and shrinking working-age cohorts.

Main Points

1. Current Pension System Structure

• Single Pillar PAYG Scheme: The pension system is a conventional single pillar pay-as-you-go scheme.
• Contribution Rate: 29% is charged on the insured wage bill, covering old age, disability, and survivor pensions.
• Fiscal Performance: The system has shown a small surplus of 5%-1% of GDP in recent years.
• Benefit Formula: Old age pensions are calculated based on length of service and wages, with a progressive structure that results in high redistribution.

2. Demographic Challenges

• Population Pyramids: The left-hand side of Figure 3 shows a favorable demographic environment in 2008, but this is expected to reverse by 2075.
• Dependency Ratio: The population dependency ratio is projected to double from 57 in 2008 to 115 in 2050.
• Life Expectancy: Life expectancy at age 60 is expected to increase from 14–19 years to 23–28 years by 2075.
• Fertility Trends: Fertility rates are expected to increase from 1.26 to 2.06 children per woman, which could stabilize the population. However, current trends suggest a contraction.

3. Early Retirement Privileges

• Current Status: Over 500,000 retirees have early retirement privileges, representing 25% of the overall old age retiree pool.
• Categories: These privileges are given to individuals in hazardous jobs, war disabled, parents of disabled children, Chernobyl victims, and others.
• Cost and Inefficiency: These programs are costly, with some privileges, like for miners, providing up to 154 mln rubles per person. They often fail to target those who are truly disadvantaged or unemployed.
• Work Participation: 71% of early retirees under 55/60 still work, indicating inefficiency in targeting.

4. Fiscal Projections and Replacement Rates

• Replacement Rates: Average replacement rates are projected to fall, with the system currently providing 95% replacement for minimum wage workers and only 25% for high earners.
• Redistribution: The system has a high degree of redistribution, as shown by Gini coefficients and progressivity indices, which are significantly higher than OECD averages.
• Fiscal Strain: By 2050, the pension system is expected to face a deficit of 5.3% of GDP, even with declining replacement rates.

5. Reform Scenarios

• Retirement Age Increase: The most viable reform option is increasing the retirement age, as the current low retirement ages are unsustainable.
• Options Modeled:
  • 63/63, Women First: Women’s retirement age increases by 6 months annually until 2020, then both genders increase by 6 months annually until reaching 63 in 2026.
  • 65/65, Both Genders Together: Both genders increase retirement age by 6 months and 3 months respectively until reaching 65 in 2030.
• Indexation Rules: Changes to benefit indexation could also help, but the document emphasizes that most needed adjustments will be on the expenditure side.
• Notional Defined Contribution (NDC): Introduction of NDC accounts is suggested as an alternative path to ensure long-term sustainability.

6. Comparative Analysis

• EU Countries: Most EU countries restrict or disallow combining wage and pension income for early retirees, which is a more effective way to enforce retirement ages than limiting benefits.
• Belarus: The country allows up to 130% of average wage for combined income, which is less restrictive but may not be as effective.

Key Information

• Contribution Rate: 29% (already high by regional standards).
• Dependency Ratio: Expected to double from 57 to 115 by 2050.
• Replacement Rates: Current average replacement rate is around 55% of average wage, but it is projected to decline due to demographic changes and policy adjustments.
• Early Retirement Privileges: These are costly and inefficient, with some groups receiving benefits 140–191% higher than average.
• Fiscal Deficit: By 2050, the pension system is projected to face a deficit of 5.3% of GDP.
• Demographic Trends: The working-age population is projected to decline by 42% while the number of retirees above pension age increases by 19%.
• Gini Coefficients: Belarus has a higher pension Gini coefficient (11.2) than the OECD average (16.2), indicating greater equality among pensioners.
• Progressivity Index: Belarus has a progressivity index of 67.5, significantly higher than the OECD average of 39.8, showing high redistribution.

Conclusion

The pension system of Belarus is currently relatively stable but faces significant long-term fiscal challenges due to demographic changes. Reform options such as increasing retirement ages, adjusting benefit indexation, and rethinking early retirement privileges are necessary to ensure sustainability. The system’s high degree of redistribution and current early retirement policies may need to be restructured to align with future economic and demographic realities.