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Major directions of securing sustainability of the pension system of Uzbekistan in the long run

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Duration: January 2014 - January 2015

Major directions of securing sustainability of the pension system of Uzbekistan in the long run

Uzbekistan increasingly starts "following" world trends. For 2000-2013 expenditures of the off-budget Pension Fund under the Ministry of Finance increased from 6.9% to 8.7% to GDP. Despite the growth in nominal pensions, they less and less are means of maintaining the quality of pensioners' life. During 2000-2012, the ratio of the average pension by age to the average wage decreased from 44.4% to 23.5% (the replacement rate of the lost earnings by retirement pension). According to the International Labor Organization (ILO), this indicator should not be below 40%.

By 2050, the share of older people will reach 21.5% in the structure of the Uzbek population, raising demands on the volume and quality of retirement services, reinforcing the need to significantly increase the financial capacity of the Pension Fund. This is difficult to achieve in the current model of employment, that does not put the expansion of formal employment as a key priority, which is the basis of formation of the Pension Fund budget. Keeping current trends in demography and employment, the Pension Fund will begin to experience budget deficit by 2017, which could be up to 3% of GDP in 2020.

The aim of the research is to develop recommendations for ensuring the financial sustainability of the pension fund by 2030.

Expert discussions on the blog:

Ensuring the Sustainability of the Pension System

Challenges and prospects of the Pension system in Uzbekistan

Useful links
One_pager_Long-term sustainability of the pension system in Uzbekistan_2014_Rus
News: Experts discussed the issues of pension system of Uzbekistan
Presentation: Financial sustainability of the pension system: Insurance VS Coverage_Rus