The initiative of the Cabinet of Ministers of Kyrgyzstan to reform the pension system has provoked public indignation. However, it is logical. The Social Fund proposes not to pay pensions to working pensioners, including the military, raise the retirement age for women, and ban early retirement. Officials did not just take the criticism of ordinary Kyrgyzstanis calmly, but, as the Deputy Chairman of the Cabinet Edil Baisalov stated, they initially wanted to achieve a resonance so that the society would become anxious about its future.
24.kg news agency journalist turned to Edil Baisalov for explanations and asked several questions.
— Does the attempt of the Social Fund and the Cabinet to raise the retirement age mean that there are problems with the budget? Is this a way for the authorities to prepare for an economic crisis?
— First of all, the aim of the parliamentary hearings was to draw the attention of society, politicians, deputies, current and future pensioners, and especially future ones, to the problems in the pension system — the Social Fund. We can solve them all, of course, at the expense of the national budget, as previous governments did. But this cannot go on indefinitely, and we, as a responsible Cabinet, have to talk about it.
We are glad that there is such a resonance, and we hope that we will discuss the problems from all sides, study them, and find the best solution. There are no specific projects right now. All that has been voiced is a discussion. And it has begun. The decision must be made jointly by all the people.
Edil Baisalov
It’s no secret that our pensions are very low, almost below the subsistence level. No one argues with this. Just like with the fact that they should be increased. The question is how to do this? At the expense of the state budget? But it is not endless. In addition, the current system of calculation of pensions is unfair. Some people make deductions conscientiously all their lives long, while others do not. And then they get almost the same pension. Is this fair?
Many people paid attention to my words that the state does not owe anything to anyone. They started saying that it was all taxpayers’ money. Exactly. But pensions should not be formed at the expense of taxes. That’s completely different. Taxes are used to build and maintain schools, build roads, provide security, and so on.
Pensions are formed at the expense of payments to the Social Fund. It is the responsibility of the individual to ensure a good pension in the future. To do this, you have to make deductions. The sooner you start doing this, the better.
Edil Baisalov
The state, of course, will never allow an elderly and lonely man to be left without food at all. This is why there is a social system, social protection. He will get an old-age or poverty allowance. But this is an allowance, not a pension. A pension is when a working person participates in the Social Fund system, accumulates funds on his account and supports current pensioners, his parents, grandparents. In the future, he or she will also receive money at the expense of working people.
The resonance also showed the lack of awareness of the population in pension issues, and we are not even talking about innovations. I would like to note that the pension system in our country is very optimal. Wonderful mechanisms and progressive systems have been introduced. But not everyone knows about them, for example, the accumulative component. Many started saying that a person saves for retirement and then dies and these savings are lost. But in fact, the funds from the funded component are transferred to the heirs. In addition, these savings can be used long before retirement to make a down payment on a mortgage or to pay for expensive medical treatment.
As such, the pension system is very progressive, liberal and fairly model-based.
Edil Baisalov
But it has all sorts of criteria that we can rearrange in order to optimize it. For example, let’s take the retirement age...
— By the way, speaking of age. Back in February the Social Fund said that the retirement age would not be raised. At the parliamentary hearings it was said that it is planned to equalize the retirement age of women and men. They say that women live longer and retire earlier. It is not fair. Why don’t they lower it for men? The average life expectancy of men in the Kyrgyz Republic is 68 years, and they retire at 63, and some do not live to that age at all.
— I would like to say once again that all the possible options and proposals were voiced at the hearings in order both the society and the leadership of the country to discuss and decide what we can do. One of the possible options is to raise the retirement age. We could say, starting from 2028-2030, let’s make the women retire at 60 and men — at 65. But that doesn’t mean it will be done tomorrow.
A woman at 58 today and 20 years ago are two different women. The Presidential Administration fired all working pensioners last week. I was dumbfounded to find out their ages. They looked like 30-year-olds. At 58, they get pensions and were going to keep working. So they fell under a political decision — they were laid off, although they could have worked for another 20 years.
Life expectancy, working capacity and lifestyle are growing. If we look 50 years back, a 50-year-old was an old woman. A woman at 40 was already considered an old woman at the time of Pushkin, Lermontov. And today’s 60-year-old woman looks young.
— Many people were outraged by the proposal not to pay pensions to working pensioners. People worked, made contributions. How can we take away what they have earned? Besides, the majority works because it is impossible to live on pension.
— That’s the point. We are talking about the same thing. We are all outraged by the low size of pensions.
The pension consists of several parts. In addition to the funded part, there’s a basic part, which is just financed from the national budget. If a person is able to work, wants to continue to work, to be useful, why should we kick him out of work and say: go, live on your pension?
— Well, of course, it’s impossible to live on a pension...
— These are all decisions we have to make. We’re all discussing that right now.
I have my own view, but I’m acting as the devil’s advocate right now. Of course, I’m not very pleased to find myself in this role, the person who voices all this, who wants to take everything away from everyone and spite everyone. But what can I do? That’s the role I have now.
Edil Baisalov
But we are not going to evade this conversation. You see, we could calmly just postpone all these issues, as previous governments did. Let this pus accumulate, let us all see that our cart is going into the abyss. Because sooner or later we will face the situation when the Social Fund will collapse, there will not be enough money for everybody, because there are not enough payers, the rates are low, we have big promises, expectations are ten times higher, and the reality will be worse and worse.
— But we should not solve the problems at the expanse of working pensioners...
— There are many different options. One of them, as you mentioned, is not to pay pensions to working people at all...
— It’s not me who says it, but the Social Fund ...
— That’s one option. The other is not to pay basic pension, only from savings. Or, for example, not index pensions to working people every year. There are a lot of different options. I hope that we will come to a consensus during the discussions.
But our most important message, what we want to achieve is to make the youth, middle-aged people understand that unlike the generation of our parents and grandparents, no one has an automatic right to expect a pension upon reaching old age.
Edil Baisalov
In a socialist state, people were not paid extra wages, everybody had a level playing field, but everybody had a guaranteed pension. The Soviet Union doesn’t exist. Our task is to make people understand that you have to make deductions in order to get a pension. It was to them that my words were addressed, that the Social Fund owes them nothing.
— Let me get back to the question. Maybe the problems of the Social Fund should not be solved at the expense of pensioners? After all it is the responsibility of the state to collect all deductions, and who is guilty of doing it badly? Honest pensioners or officials?
— It is from the point of view of honest payers, if I were them, I would demand that only those who have made contributions to the Social Fund receive pensions. If we explain to people that if pensions were paid only to those who participated in this system, the minimum pension could be 10,000 soms.
— We’re talking about pensioners again... Maybe it’s necessary to reform the Social Fund?
— We have already started. But we shouldn’t complain against the Social Fund because it is the executor. Policy is approved by politicians: the President, the Government, the Parliament and all our people. Our Cabinet is different, because we set ourselves the goal of improving public administration from the very beginning. We said we would collect taxes, we would make everyone pay customs duties, and we would not allow any corruption or gray schemes. We will also make the Pension Fund transparent, honest, fair, so that working people get a very decent pension.
And those who don’t take part in this system cannot count on a pension tomorrow. That’s something we need to bring to everyone’s attention.
There are certain proposals to encourage businesses to make contributions.
But I want to say, this is going to be a political decision in any case, no matter what option we will choose during the discussions. Such a discussion should take place.
The Cabinet is not afraid of losing popularity, of being hated by both the elderly and the young. We are a responsible government, and we will speak honestly, directly and openly.
Edil Baisalov
We want pensions to be fair, decent, understandable for the entire community.
