The government revealed that a significant minimum pension increase may not fit within the current budget. Officials from the Ministry of Finance explained the financial implications clearly.
They reported that around 480,000 pensioners receive less than MNT 1 million. Raising the minimum pension to MNT 1.5 million would require roughly MNT 4.3 trillion.
State Secretary J.Ganbat emphasized that the Ministry of Finance does not set social policy. The Ministry of Family, Labour and Social Protection decides pension levels. However, finance officials outlined potential funding options.
They identified three main ways to finance a minimum pension increase. First, the government could raise revenue, for instance by increasing social insurance contributions, VAT, or personal income tax. This step would place a heavier burden on workers and taxpayers. Second, the government could cut other expenditures, though drastic measures would apply.
Reducing civil servants by half or eliminating large portions of other sector budgets could generate the necessary funds. Third, officials proposed large-scale public spending restructuring, which would require careful planning and approval.
The Ministry concluded that the government cannot raise the minimum pension to MNT 1.5 million soon without major fiscal changes. Government leaders will decide which combination of revenue increases or spending cuts to implement, then discuss the plan in Parliament.
Meanwhile, the draft budget allocates MNT 378 billion for a 6% pension increase to match inflation. Currently, the minimum full pension stands at MNT 689,000, and the minimum proportional pension is MNT 570,000.
Pensioners demand a higher floor, but officials warn the minimum pension increase must remain financially sustainable. The government plans to continue discussions on balancing social needs with fiscal realities. Leaders will debate and approve any changes through Parliament.
