IMF urges Uzbekistan to reform pension system, recommends raising retirement age

According to the conclusions of an IMF mission to Uzbekistan, the existing pension system needs reform to maintain stability and provide decent pension payments to retirees. The IMF suggests achieving this through the following measures:

• Gradually increasing the low retirement age;
• Phasing out preferential contribution rates for certain organization categories while increasing the standard contribution rate;
• Calculating pension benefits based on average income during working years;
• Introducing a pension indexation mechanism based on automatic price indexing.

The IMF emphasizes that any social benefits aimed at reducing poverty in old age should be strictly targeted. These benefits should be determined based on needs assessments, funded through the state budget, and managed in coordination with other social support measures to avoid duplication.

According to the IMF, a seminar on pension reform was held in Uzbekistan in December 2024, during which work began on preparing a conceptual document. This document is scheduled to be presented to the president by September 2025, although it was initially planned for March 1, 2025.

As of June 1, Uzbekistan had 4.19 million pension recipients, including 3.47 million receiving age-based pensions, 476,200 receiving disability pensions, and 248,900 receiving pensions for the loss of a breadwinner.

The average pension nationwide is 1.43 million UZS, while in Tashkent, it is 1.96 million UZS.

In April 2023, the World Bank, in its report “Enhancing the Efficiency of Public Spending on Human Capital and Water Infrastructure in Uzbekistan,” recommended raising the retirement age (currently 60 for men and 55 for women). The report suggested that, upon adoption, a transition period should be provided to allow workers nearing retirement age to adjust their plans.

The World Bank noted that adopting a decision within the framework of the National Social Protection Strategy for 2021–2030 to gradually increase the retirement age to 65 (by 3–4 months annually) starting from 2025 would be optimal. This would help ease the pressure of demographic changes, gradually shifting the boundary between the working-age population and retirees. Implementing this before the demographic growth potential of the workforce diminishes (by the mid-2040s) is critical for Uzbekistan, as it is already a matter of national competitiveness.

The report highlighted that neighboring countries have higher birth rates and retirement ages, providing them with certain advantages. In the long term, raising the retirement age will help ensure the stability of the pension system and public finances, according to the World Bank.

In July of the previous year, the Agency for Strategic Reforms reported that due to high levels of informal employment, Uzbekistan’s pension system covers only 38% of the population. Compared to other countries, pension contributions are relatively high (12–25%), while payments are at an average level. The agency has been studying ways to make the pension system more adequate.