“Rip-Off”: What Happens to Pensions of Belarusians?

Reforms after the change of power will raise pensions to the level of Poland and the Baltic countries.

In 2020, real pensions fell for eight months out of twelve. At the same time, the prices of many goods and services have increased significantly. Why is it happening? Mikhail Pastukhov, ex-judge of the Constitutional Court of Belarus, answers the questions of Charter97.org.

- It is happening for obvious economic reasons. There is inflation, unrestrained price rises, but there is no increase in the level of workers' incomes and pensions. Belarus is at the top of the ratings for inflation among the post-Soviet republics. The authorities do not fully compensate for these effects.

Around the second half of the year, there is usually a decree to increase pensions by 5%. As far as I know, this 5% comes from the cost of living, so it turns out that it is an insignificant amount of around 10-15 rubles. Such an increase cannot improve the situation of pensioners.

- Recently, a pensioner from Baranavichy said that "one would have to survive with a pension only". How do you assess the opportunities and the situation of the Belarusian pensioners?

- I would say it is a complex situation. Most pensioners get somewhere around 300-450 ruble. However, civil servants, the military get pensions several times higher. They get their pensions as if for service to the state directly from the budget, through their ministries and departments.

Most of the Belarusian pensioners receive pensions from the Social Security Fund. However, there are not enough funds to pay pensions and various benefits every time. It is due to objective reasons because many enterprises do not make a profit and cannot make appropriate deductions, and the fund has to be constantly subsidized.

As far as I know, subsidies amounted to about 2 billion rubles in 2020. It's planned to add 1.8 billion rubles to the fund in 2021. These are very large sums. Nevertheless, they do not make up for the lack of funds needed for pensions. Therefore, it is hard to live on these meager pensions of 150-200 dollars. One has to deny oneself everything.

I can say every shopping time costs 30-50 rubles. After all, pensioners have to pay another 50 rubles for utilities. What do they have left? They also need money for medicine. I would even say it's the poor existence of most pensioners.

- Debts of enterprises and institutions on taxes and social insurance in Belarus have reached their maximum. At the same time, pensions of the elderly depend on the deductions to the Social Security Fund. What can such dynamics with debts cause?

- It is a threatening trend that is intensifying. More and more enterprises do not make enough profit or are unprofitable. Nevertheless, they have to pay 33% of their earnings to the Social Security Fund. Now, many enterprises cannot cope with this obligation.

Today our pensioners face the threat of losing pensions. The state itself is bankrupt. It drowns in debts to other countries, and the same is true of our businesses. It indicates the necessity of the fundamental reform of the Belarusian economy. Otherwise, pensioners may lose pensions.

- Media often get reports about arrears in pensions and allowances in different cities. Can we say that the authorities have serious problems in fulfilling their social obligations to the citizens?

- Arrears in payments occur in district centres, as they should first receive money and then distribute it among the population. If one does not find the necessary sums at once, the settlement with pensioners is postponed. One can say that problems are growing. It is true.

- What kind of pension system does Belarus need for people to receive a decent pension?

- I am one of the developers of the pension reform concept. We are going to discuss it at the meeting of the Central Committee of the Belarusian Hramada Social Democratic Party to put it into practice. The basis of the reform is the need to increase the size of pensions and the length of service. Most likely, the retirement age will remain the same, which Lukashenka set in 2015.

In my opinion, it is necessary to stop these predatory deductions from pensions carried out under the guise of the so-called reduction factor. When a person works and his pension exceeds the average level, the authorities take away quite a significant part. For example, I retired last year. I should receive more than 600 rubles, but the authorities deduct 150 rubles. It is a rip-off. Besides, pensioners need to pay contributions to the Social Security Fund, although they already have a pension. The length of service is not recalculated when a person continues to work. It is a deception of the population.

One should equalize the pensions that Belarusians receive. Most of them get their pensions from the "public fund. Civil servants get several times as much, straight from the budget. I believe that it is necessary to equalize the amount of pensions paid to increase the minimum and the average level. To limit the immeasurable pensions that some government officials receive. Deputies receive 60-70% of their salaries. Imagine, with a salary of 3 thousand rubles, their pension exceeds a thousand and a half. I believe that this is too much and unreasonable.

We should switch to the funded pension, and the employee and the employer should create it together. It turns out that the state guarantees a minimum or average pension, depending on the time of work. Meanwhile, there is an opportunity to save money in some special funds for additional security. Roughly speaking, an employer and employee pay 10%. It could significantly increase pensions.

What could raise pensions in Belarus? We could at least try to raise pensions to 700-800 rubles by reducing spending on weapons, the military, and the military-industrial complex. Moreover, it is necessary to make state revenues more transparent. Take into account the extra-budgetary and other reserve funds. People do not know and have no idea how much is there. One can judge the number of revenues and how to distribute them in a more transparent financial structure.

The Belarusian Hramada Social Democratic Party has made such developments. In the near future, we will discuss this concept again at a meeting of the Central Committee. Then it will be made public for general use. It may happen if the socio-political situation in the country changes. It is impossible now. However, we believe that pensions should increase.

We must strive for the pensions of Belarusians to eventually, and preferably soon, equal to the pensions received by European countries, including our neighbours in Poland and Baltic states. It is realistic if the situation in the country changes for the better.

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