Goals for the golden years


Mongolia is home to about 218,700 elderly who are receiving a senior pension. According to reported data, 800 to 900 billion MNT is spent annually on pensions. The Mongolian Government spent an additional 90 billion MNT to increase senior pensions by 20 to 27 thousand MNT, this year. However, elders weren’t pleased with this decision, because they were expecting to see an increase of 15 to 30 percent.
The Ministry of Population Development and Social Welfare organized a meeting “Issues about Reform of the Pension System” in order to develop understanding and to resolve questions about the changes, on February 25. The Mongolian pension fund is financed by commission revenue. The deficit of the pension fund represents two percent of today’s GDP, but if the system continues functioning like this, the losses to the pension fund will increase. It could grow to seven percent of GDP by 2030, and 10 percent by 2040, according to forecasts by international researchers working with the World Bank. The researchers say, “This study shows that a reform of the pension fund is required.”
While the pension fund is experiencing loss, the number of seniors who will be eligible to receive retirement pensions in the future is steadily increasing along with population growth. Nevertheless, pensions will be twice as low in the future compared to what is presently available. To stabilize this loss the Mongolian Government needs to raise the retirement age, close the gap in the retirement age between men and women, increase pension fees, and lower the amount of monthly pensions, as suggested by international institutions.
Some officials say, “The average age of retirement for a pensioner is 67 in most other countries. In Mongolia, workers retire earlier, considering professional identities and working conditions such as the military and arts. Early retirement increases the costs to pension insurance funds. Thus, if you want to earn a higher pension, you need to prolong your retirement age. By doing this, accumulation will generate and the revenue of pension insurance will be increased.” These are the controversial changes that will be made to the system.
Today, the average life expectancy of Mongolians is 67, so one day you can retire and the next day you can die. These days 40 year-olds are struggling to find jobs, so where and what will 60 year-old elders do? Instead of leaving their livelihoods to chance, it would be better to provide the legal conditions for seniors to continue working, even after they reach retirement age. And it’s better to increase the retirement age of those who work in the military and the arts. In a country like Mongolia with extreme weather, it makes sense to retire early. Nowadays, when it’s hard for even a young man to find a job, people are looking to the Mongolian Government to take care of its citizens. But the Mongolian Government sees its citizens as a tool to increase pension insurance funds.
People have expressed their opinions about the changes, suggesting that there are many ways to increase the pension fund. They suggest that high ranking officials in government limit their luxury consumption. Mongolians understand but are shocked by a global average retirement age of 67 in contrast to the Mongolian average life expectancy of 67. If the average life expectancy of Mongolians was over 80, like in highly developed countries, perhaps it would be another story.

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