Linking Pension Benefits to Years of Service is the Fairest Approach

As part of the ongoing development of amendments to the Social Insurance Law Package, a seminar titled “Understanding Old-Age Pensions: Historical Evolution, Goals, and Reform Policies” was held on June 26, 2025, for professionals working in the social insurance sector.

The event featured guest speaker Mr. Alexey Sluchinsky, pension systems expert and economic advisor, who is graduate of Harvard Kennedy School and currently consulting on pension reforms in Mongolia.

In his presentation, Mr. Alexey Sluchinsky emphasized that “linking pension benefits to the number of years worked is the most equitable system”. He explained that the longer a person contributes to the system, the higher their pension benefit should be. Given the impact of inflation over time, most countries now adjust pensions in line with inflation and wage growth. Some nations have been even adopted automatic indexation mechanisms.

He also noted that retirement age should be linked to the country’s average life expectancy which means the longer people live, the later they retire. In Mongolia, the current retirement age is 60 for men and 55 for women, with eligibility for full pension benefits granted after 25 years of contributions.

As an example of global best practice, Mr. Alexey Sluchinsky shared the case of Norway, one of the wealthiest countries in the world, where citizens are officially eligible for full pensions at age 68. However, a flexible, phased approach is used to allow earlier retirement with reduced benefits:

At age 60: 20% of the full pension

At age 62: 40%

At age 64: 60%

At age 66: 80%

At age 68: 100% of the pension

“This model offers a long-term vision with flexible options for citizens and is considered an effective and fair approach to pension planning,” he stated.