At independence all the countries of the Former Soviet Union (FSU) inherited a
extensive system of social welfare, including a comprehensive pay-as-you-go pension
system characterised by low retirement ages, relatively generous opportunities for early
retirement for selected groups and high replacement rates. The economic dislocation of
the early 1990s had significant consequences for the pension systems in the region.
Rising unemployment and economic restructuring reduced the contribution base,
increasing system dependency rates. In the face of falling public expenditure many
countries undertook wide ranging reforms of the pension system – including tightening
eligibility criteria, increasing retirement ages, and moves away from defined benefits
towards defined contribution systems. This paper details the impact of transition on
pension systems during the 1990s, through to the mid 2000s in the region as a whole. It
then focuses on the first wave of pension reforms and the current pension systems in the
region today in four case study countries: Armenia, Kazakhstan, Kyrgyzstan and
Tajikistan.