Economy
Posted: 6 months ago

After 27 Years – Retirement Age and Pensions in Post-Soviet Countries

There were times, when the same pension amounts were paid in all republics of the Soviet Union. What has changed in 30 years? How much pension is paid today? What is the retirement age in Post-Soviet space? Starting 1956, in Russia the retirement age for men was 60 years old and for women – 55 years old.

Starting January 1, 2019, the retirement age increased by 1 year for both men and women. The minimum pension today in Russia amounts to 216 USD. As a result of the pension system reformation, three categories of pension schemes run in Russia: social, insurance and contributory schemes. Averaged pension for military servicemen amounts to 25 000 Rubles, that is 337 USD. Among the Post-Soviet republics, the highest pension is recorded in Estonia – 434 USD. High pensions are recorded in Latvia and Lithuania too – 315 USD and 286 USD respectively. Pension exceeds 100 USD in Russia, Belarus – 216 USD, Kazakhstan – 159 USD and Azerbaijan – 117 USD, Turkmenistan – 93USD, Armenia – 84 USD, Kirgizstan – 76 USD, Georgia – 75 USD, Ukraine – 65 USD, Moldova – 64 USD, Uzbekistan – 35 USD and Tajikistan – 30 USD.

It is interesting fact that the highest retirement age is recorded in Georgia for both men (65) and women (60), as well as in Lithuania, Latvia and Estonia. In all other Post-Soviet countries, the retirement age ranges from 60 to 63 years old for men and from 55 to 59 years old for women.

Moreover, the retirement age in Georgia and Baltic countries are almost identical with the retirement ages in European countries, excluding Denmark, Italy and Netherlands, where the retirement age for men is 74, 71 and 70 respectively.

As reported, starting January 1, 2019 Georgia launched the contributory superannuation scheme, which enables Georgian citizens to make retirement savings. Under the applicable law, Georgian citizens under 40 years old (employed) must pay monthly 2% from their salaries. Moreover, the employer also pays 2% contribution and the Government also takes 2% from the employee’s income tax and directs it to the pension fund. Retirement savings will be managed by the Pension agency. For instance, if your monthly salary makes up 1000 GEL, the employer will pay 20 GEL, the employee – 20 GEL and the Government – 20 GEL. Finally, retirement savings per month will total 60 GEL.

Almost the same system runs in Armenia, but the employee used to pay 5% of the salary and another 5% was paid by the Government. In February 2019 this correlation changed and the employee pays 2.55% to the pension fund, while the government’s ratio increased to 7.5%. Another difference is that retirement savings are administered by Amudni French company and C-Quadrat German company. Besides contributory pensions, social pensions are also issued in Armenia and its average amount equals to 84 USD.

As to Azerbaijan, according to Sahil Babaev, Minster of Labor and Social Provision, this year the averaged pension in Azerbaijan will be 240 Manant (140 USD). The minimum pension also grows by 14.9%  to 133 Manat (78 USD).

According to the Azerbaijani government, in 2019 the cost of living of pensioners made up 149 Manat (about 87 USD). According to the statistics office of Azerbaijan, there are 1 287 000 pensioners in the country, down 1.2% year on year.

It is noteworthy that, under the official statistics, the consumer basket in Azerbaijan equals to 150 Manat (about 87 USD).