IMF advises caution as Uzbekistan prepares pension system reform.
Uzbekistan has taken the first steps toward reforming its pension system by preparing a draft reform concept, although the broader overhaul remains at an early stage, according to the International Monetary Fund (IMF)..
The International Monetary Fund (IMF) has urged caution as Uzbekistan embarks on reforming its pension system, having initiated the process with a draft reform concept. However, the IMF indicates that the overall reform is still in its infancy.
In a recent press release, the IMF highlighted that the authorities have created a draft concept for pension reform, which includes initial analytical work and consultations. Nevertheless, the Fund pointed out that the comprehensive reforms necessary for the medium-term sustainability of the pension system are still at an early stage, primarily due to the absence of a required actuarial assessment. The IMF emphasized that this assessment is crucial for thorough reform, as it would analyze the financial sustainability of the pension system over the medium term.
Additionally, the IMF advised delaying other significant reforms that might heighten budgetary pressures, particularly modifications to the civil service pay structure. It suggested that establishing a permanent civil service pay scale would be more suitable starting in 2027, following an evaluation of the fiscal implications of healthcare and education reforms slated for 2026, while also considering the parameters of the pension reform. The Fund recommended looking into personnel reductions as a means to manage spending.
Simultaneously, the IMF cautioned against raising contribution rates to the mandatory funded pension pillar, citing concerns over increased wage-bill costs, negative effects on the labor market, and the underdevelopment of financial markets. It also stressed that any pension reform initiative should undergo an actuarial assessment prior to implementation.
The groundwork for Uzbekistan's pension reform commenced in September 2024, when the Cabinet of Ministers approved the formation of a working group responsible for developing a reform concept for the state pension system. This group, led by Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov, was tasked with identifying the current system's deficiencies and submitting the draft concept to the Presidential Administration by March 1, 2025.
In April 2025, the IMF advocated for pension reform as part of broader strategies to enhance Uzbekistan's fiscal policy and improve public spending efficiency.
Previous assessments by the IMF revealed that Pension Fund revenues had increased 3.4 times over the last decade, while expenditures had surged fivefold. Since 2020, pension payments have necessitated ongoing transfers from the state budget, which amounted to UZS 11 trillion in 2022, accounting for approximately one-quarter of the Fund's total spending, and were expected to rise to UZS 15 trillion in 2023, or 29% of total expenditures. By 2030, these transfers are projected to escalate to UZS 38 trillion.
In May 2025, Koba Gvenetadze, the IMF Resident Representative to Uzbekistan, stated that the country requires pension reform, noting that the current retirement age—60 for men and 55 for women—falls below the global average. He recommended a gradual increase in the retirement age while emphasizing the need to finalize the reform concept first.
The IMF has also previously suggested raising the minimum retirement age and implementing automatic pension indexation tied to inflation.
The Pension Fund of Uzbekistan has reiterated that no definitive decision has been made regarding an increase in the retirement age. The agency stated that the proposals from international experts are still under evaluation for their relevance to Uzbekistan's context, their impact on living standards, and their broader economic implications.