Effectiveness of pension systems in post-Soviet countries

The effectiveness of a pension system depends on whether it fulfills its basic purpose, which is to provide retired people with income. International organisations recommend ensuring a minimum level of a pension, possible to determine by means of a replacement rate, which facilitates comparative analyses. The aim of the research presented in the article is to determine the effectiveness of pension systems in post-Soviet countries using the replacement rate and the dependency ratio of the pension system. The study examined 14 countries created after the collapse of the Soviet Union (excluding Turkmenistan). On the basis of the results, the analysed pension systems were ranked according to the examined features. The analysis covers the years 2007–2017 for which data were obtained from publications of the statistical institutions of each individual country. Descriptive statistics measures, indicator analysis and Spearman rank correlation were applied. The research indicates that Belarus, Estonia, Lithuania and Latvia have obtained the highest effectiveness of the pension system measured by the replacement rate, while the lowest effectiveness was observed in Georgia, Armenia and Tajikistan. On the other hand, Uzbekistan, Kyrgyzstan and Azerbaijan had high values of the dependency ratio, while the lowest were noted in Ukraine, Estonia and Lithuania. A significant correlation between the replacement rate and the dependency ratio of the pension system occurred in only three of the analysed countries, namely Azerbaijan, Estonia and Moldova