Another Hole in the Pension Fund

Last year the Fund missed 1.5 billion rubles.

It has always been like that and will always be unless the approach to the economy changes. This is the way independent economists comment on the lack of funds in the Pension Fund, Belsat informs.

There is another hole in the Pension Fund. Minister of Labor Iryna Kastsevich told the "deputies" that the Social Protection Fund would need additional funding this year.

Last year the Fund missed 1.5 billion rubles, they were borrowed from the budget. The main reason, according to Minister Kastsevich, is the failure to meet economic growth plans: the government expected an increase in gross domestic product by 0.3%, and in reality it fell by more than 2.5%.

According to economist Leu Marholin, the problem is not only in the overall state of the Belarusian economy, but also in the one-sidedness of the domestic pension system which operates exclusively under the "solidarity" principle.

"That is, while people earn money, pensioners receive pensions, when people start earning less and if people go to work abroad, there is also less money for pensioners," Leu Marholin says.

And this is a serious problem in Belarus. Mass reductions in the real sector of the economy happen every year. Last year net dismissal amounted to more than 107 thousand people. The suppression of small businesses and the reduction of the number of individual entrepreneurs has a negative impact. To cover the deficit in the social protection fund the authorities also experienced the retirement age increase.

"Let the person everyone knows tries to survive on a pension," Minsk dweller says.

Of course, the Belarusian society is maturing, and the number of pensioners is increasing. Are there any other solutions besides late retirement?

This is what Minsk residents say:

"We need reforms here, the same private pension funds."

"Well, I'm young, I do not think about it yet. This is still a long road to me."

"Let's retire and then we'll think about it."

But economists say that it is necessary to think about this in advance. They advise to divide the provision of pensions into several sources at the state level - not only at the expense of taxes of current employees, but also with the help of pension insurance from an employer and person's own contributions to pension. And although the size of the Belarusian pensions is miserable, Belarusians do not grumble at disruptions in payments. What is the price of such regularity?

"If there is no money for pensions, they just print this money because they understand that if there are arrears in pensions there will be very serious consequences,"- Leu Marholin believes.

As a result, the economist emphasizes, the inflation and prices are rising. Therefore, even progressive changes in the pension system will not work without a full review of the entire economic policy.