IMF advises caution as Uzbekistan prepares pension system reform

In a press release, the IMF said the authorities have developed a draft concept for pension reform that includes preliminary analytical work and consultations. However, the Fund noted that the broader reforms needed to ensure the pension system's medium-term sustainability remain at an early stage because the necessary actuarial assessment has not yet been carried out. According to the IMF, such an assessment is a key prerequisite for comprehensive reform, as it would evaluate the pension system's medium-term financial sustainability.

The IMF also recommended postponing other major reforms that could increase budgetary pressure, particularly changes to the civil service pay system. It said introducing a permanent civil service pay scale would be more appropriate from 2027, after assessing the fiscal impact of healthcare and education reforms planned for 2026 and taking into account the parameters of the pension reform. The Fund also suggested exploring personnel reductions as a way to contain spending.

At the same time, the IMF advised against increasing contribution rates to the mandatory funded pension pillar, citing higher wage-bill costs, adverse labor-market effects, and underdeveloped financial markets. It also stressed that any pension reform package should be subject to an actuarial assessment before implementation.

Reform plans remain under development

Work on Uzbekistan's pension reform began in September 2024, when the Cabinet of Ministers approved the composition of a working group tasked with developing a reform concept for the state pension system. The group, led by Deputy Prime Minister and Minister of Economy and Finance Jamshid Kuchkarov, was instructed to examine the shortcomings of the current system and submit the draft concept to the Presidential Administration by March 1, 2025.

In April 2025, the IMF recommended pension reform as part of broader measures to strengthen Uzbekistan's fiscal policy and improve the efficiency of public spending.

According to earlier IMF assessments, Pension Fund revenues increased 3.4-fold over the past decade, while expenditures grew fivefold. Since 2020, pension payments have required permanent transfers from the state budget. Those transfers amounted to UZS 11 trillion in 2022, representing about one-quarter of the Fund's total spending, and were projected to reach UZS 15 trillion in 2023, or 29% of total expenditures. By 2030, transfers are forecast to increase to UZS 38 trillion.

In May 2025, IMF Resident Representative to Uzbekistan Koba Gvenetadze said the country needed pension reform, noting that the current retirement age – 60 for men and 55 for women – is below the global average. He recommended gradually raising the retirement age while stressing that the reform concept should first be finalized.

The IMF has also previously recommended increasing the minimum retirement age and introducing automatic pension indexation linked to inflation.

The Pension Fund of Uzbekistan has repeatedly emphasized that no final decision has been made to raise the retirement age. The agency said proposals put forward by international experts are still being assessed for their suitability to Uzbekistan's conditions, their impact on living standards, and their broader economic consequences.