Decree No. 367 “On voluntary insurance of additional funded pension” will create a new system of individual insured pension accounts for employees from October 1, 2022. Participation will be voluntary but supported by tax incentives and the partial diversion of employer social security contributions to the new accounts if employees contribute. The system will operate in parallel with existing voluntary insured retirement arrangements based on endowment policies to supplement social security benefits. Plans are offered by Stravita, a state-owned insurer holding about two-thirds of the market, and Priorlife, a private insurer.
The main provisions of the new pension system will include:
The new arrangement is intended to be cost-neutral for employers, so the direct impact on employers will be modest; however, employers should be aware of and plan for resulting process changes (e.g., withholding and transfer of employee contributions). None of the companies surveyed by Willis Towers Watson offer supplemental retirement benefits, and it’s not expected that these reforms would stimulate the practice. According to the Ministry of Labor and Social Protection, only around 5% of the population have opened voluntary arrangements. The average monthly contribution for pension insurance was only 52 Belarusian rubles (equal to approximately US$22), according to Stravita. Individuals with an existing arrangement will have the option to convert existing plans to the new model.
