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NSSI for pensions: money may not be enough
Income from social security contributions may not be enough to cover the costs of pensions, benefits and allowances. There are several factors that increase the probability of such a hazard. This was noted by NSSI experts in their analysis of strategic risks for the management of state social security in the period after 2020.
According to the analysis, demographic processes rank first among the factors. Population forecasts indicate that by 2020 the age dependency ratio in the elderly (population 65 and over for every 100 people aged 15 and 64) will reach 34.30.
This means that for every 100 people aged 15 to 64, there are 34 people aged 65 and over. In the long term, the trends are not optimistic: The value of this ratio is expected to reach almost 45 in just two decades, and by 2050 it will exceed 52, according to NSSI analysis.
Under current legislation, the social security balance is expected to remain negative (expenditures remain higher than income) throughout the period from 2019 to 2070. At 3.3% of GDP, the deficit is expected to of social security increases to 4 8% of GDP at the end of the period.
How much increased the pensions of retired people who work?
Decisions related to changing one or another of the insurance system parameters can speed up or slow down the impact of demographic processes on the state’s ability to meet its commitment to current and future policyholders and retirees, experts say.
The other factors that pose a risk to the system are that the NSSI cannot detect errors, irregularities and fraud with the social security funds, that the institute lags behind in the development of information technologies and does not have enough human potential to perform their tasks.
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