Ridiculous: Three Questions about the Government’s Proposal to “Postpone for Retirement”

Will people live to see the moment when they are allowed to use their savings?

On September 21, at a meeting with Lukashenka, the issue of developing an “additional voluntary pension program” was discussed, Salidarnasts writes.

Following the meeting, Minister of Labor and Social Protection Iryna Kastsevich stated that Belarusians will be offered a new beneficial mechanism for accumulating funds for old age. What does it consist of?

Employees will be offered to pay an additional contribution (in addition to the now mandatory contribution of 1% of salary) to a funded pension in the amount of up to 10% of earnings. Everyone chooses the exact size independently. At the same time, the employer will be obliged to make additional payments commensurate with the contributions of employees.

“There are no losses for a person but only advantages. Because, by entering the voluntary pension insurance system, he forms his additional income for old age,” the minister assured.

The first thing to note here is that such mechanisms do exist successfully in developed countries. Obviously, the further, the more the solidarity pension system in Belarus will stall due to the population decline.

There are already over 2.5 million pensioners in the 9.5 million country, payments to whom constitute 30% of the total budget expenditures.

However, taking into account the specifics of the Belarusian regime, at least three critical questions about the proposed “beneficial mechanism” can be distinguished.

The first question is: won't inflation eat up voluntary savings?

The journalists asked the minister how the funds of the funded pension system will be protected from depreciation. In response, Iryna Kastsevich admitted that certain risks exist.

Of course! In Belarus, the devaluation of the ruble has occurred many times.

Since the system of power has not changed since then, it is not clear why the Belarusians should take the risk and use the proposed option instead of putting aside currency under the pillow. Moreover, there is no extra money in families.

The second question is: how will the authorities use pension savings?

According to the minister, the deferred amount will be capitalized, that is, the money will not just accumulate but work for the economy, invest in projects with high returns.

At this moment, many should have become really scared. It is well known how the Belarusian authorities invest billions of dollars. The modernization of the woodworking, cement industry, and many other enterprises resulted in net losses.

And should the Belarusians decide to entrust their savings to such an investor?

The third question is: will the workers live up to the moment when they will be allowed to use their savings?

Starting next year, men in Belarus will begin to retire at the age of 63. So far, the authorities are silent about a further increase in the retirement age, but this is unlikely to last long.

We can recall that, during the 2015 presidential campaign, Lukashenka said that there would be no increase in the retirement age. But this is exactly what happened soon after the elections.

Won't it turn out that workers will be persuaded to make voluntary savings, and, after a while, they will raise the retirement age so much that many of them will not be able to use them?

For these reasons, it is understandable why some people on social networks believe that the authorities are concerned not about the bright future of current workers in old age but the search for funds for the near existence of the system.