Will the retirement age be increased? A draft of major changes to the pension system has been announced

A historical document containing the largest and most fundamental reforms of Uzbekistan's social security and pension system in recent decades has been presented to the public. According to the draft presidential decree posted on the portal for the discussion of normative-legal document drafts, it is proposed to gradually increase the retirement age in the country, more than double the minimum labor experience required for assigning a pension, and introduce mechanisms for using funded pension funds throughout one's lifetime. According to the draft, starting from 2028, the retirement age will be extended by three months each year, and by 2039 it is expected to be set at 63 years for men and 58 years for women.

In addition, radical updates are planned starting from 2027 regarding the wage period taken into account when calculating the pension amount and the required minimum experience. One of the most important innovations is allowing citizens to invest their funded pension money and, in the future, use it for treating serious illnesses or as an initial payment for a mortgage. This document is currently a draft and may officially change or be approved after passing public discussion. So, in what order will the new stages regarding the retirement age and experience be implemented, who will benefit from the calculation formula, and when will accumulated funds be available for use?

Retirement age: Gradual increase from 2028 to 2039

The proposed new schedule and age criteria:

• Increase by 3 months per year: Starting from 2028, it is planned to gradually extend the retirement period for citizens by 3 months each year;

• Final limit in 2039: Once this system comes into full effect, by 2039 the retirement age will be raised from 60 to 63 years for men, and from 55 to 58 years for women;

• Demographic and financial stability: This step is explained by the increase in the average life expectancy of the population and the need to ensure the long-term stability of the pension fund.

3 important changes starting from 2027: Experience and wages

New requirements in the internal mechanisms of pension assignment:

• Wage period from 5 to 20 years: Currently, when assigning a pension, any consecutive 5 years of the last 10-year labor period are taken, but from 2027 this indicator will be increased to a full 20-year period (this aims to prevent informal employment and receiving salaries in "envelopes");

• Minimum experience from 7 to 15 years: The minimum labor experience required to receive an allowance will be gradually raised from the current 7 years to 15 years;

• 13-fold increase in the upper limit: Starting from 2028, the upper limit of wages taken into account in calculating the pension will be increased from the current 12 times the base calculation amount (BCI) to 13 times, which will allow citizens who officially received higher salaries to receive a larger pension.

Getting money from the fund for mortgages and treatment: A revolutionary proposal

Changes in funded personal pension accounts:

• Investment opportunity: Citizens are offered the right to invest their funded pension funds at Xalq Bank into reliable financial instruments that generate income;

• Opportunity to withdraw funds from 2030: According to the proposal, starting from 2030, citizens may be granted the right to direct their accumulated money even before retirement for two vital purposes — treatment of serious illnesses and making a down payment on a mortgage loan;

• Public discussion is important: As a reminder, these norms are currently a draft presidential decree. The document may be changed, supplemented, or revised taking into account public opinions and proposals.

This proposed project on reforming the pension system is expected to be one of the most important steps towards developing the official labor market, reducing the shadow economy, and increasing citizens' pension capital in Uzbekistan.

In your opinion, how correct and justified is the decision in Uzbekistan to increase the retirement age to 63 and 58 years and raise the minimum work experience to 15 years? Do you support providing the opportunity to use money from the personal pension fund for mortgages or medical treatment? Leave your comments in the comments section and share this analysis of this important draft law, which directly concerns the future of every citizen, with all your loved ones and colleagues!