Fiscal Council demands urgent pension-system reforms: the gap reached 54.4 billion denars

North Macedonia’s Fiscal Council today presented the analysis of the sustainability of the pension system and the Second Pillar, commissioned by it, and demanded urgent reforms, as Nezavisen reports. According to the analysis, the pension system is under structural fiscal pressure and the current gap has reached 54.4 billion denars — around one billion euros.

If no measure is taken, the deficit would be 6.3 percent of GDP in 2030 and would reach a peak of around 6.6 percent in the period 2035–2037, while the most dangerous period will be 2038–2048, when transition costs reach their peak and the number of insured persons per pensioner falls sharply, Ekonomija i Biznis writes. Already 41 percent of the Pension Fund is covered with state funds, according to 4NEWS.

The recommended package of reforms, as Sloboden Pečat reports, includes gradually raising contributions towards 20 percent, indexing pensions only with inflation and not with inflation plus wage growth as is the case now, greater participation of women in the labour market and reducing the informal economy, as well as continued voluntary work after retirement age.

Professor Blagica Petreski, executive director of Finance Think, warned in Deutsche Welle that “playing with the pension Second Pillar can be dangerous”. The Fiscal Council raised the alarm that the time is coming when the number of insured persons will be smaller than the number of pensioners.