That the Russian government is discussing a possible increase in the minimum length of service to receive a pension. This will increase the income of the Pension Fund without increasing retirement age, - and increase the attractiveness of receiving a white salary. Later, the Ministry of Labor hastened to officially refute the planned changes, however, experts interviewed by "Such Affairs" are confident that the minimum length of service will sooner or later be significantly increased.
Today, according to the law, the pension figures are as follows: the minimum length of service that gives the right to an old-age pension is 8 years. The generally established retirement age for women is 55 years, for men it is 60 years. Every year, officials report that the issue of raising the retirement age will not be considered in the near future. According to Vedomosti, an increase in the minimum length of service for calculating an insurance pension can be a substitute for raising the retirement age.
Economist Yuri Mikhailovich Gorlin, deputy director of the Institute for Social Analysis and Forecasting at the RANEPA, says experts have long been considering raising the minimum work experience. Gorlin noted that the requirements for the minimum experience are already growing: until 2015 it was 5 years, with a gradual annual increase it is planned to bring it up to 15 years.
“It is not known whether this issue is really being discussed in the government. Among economists, yes, an increase in the minimum insurance period as one of the measures to reform the system of insurance pensions has long been discussed, commented Gorlin. - Imagine: a person works for five years, then he retires for 20 years - no pension system can withstand this in principle. In other countries, the mandatory length of service is 20, 25, even 40 years. Now we are gradually adding one year each, so by 2024 it is planned to achieve a minimum insurance period of 15 years. I will say that this is not enough: at present, people who retire at retirement age, average experience is about 35 years. Therefore, a gradual increase in requirements regarding the duration of the insurance period will only be effective in the long term, at least in 10-15 years,” Gorlin believes.
According to Gorlin, an increase in the minimum length of service in itself will not have a beneficial effect on the budget: “Vedomosti writes that this is a possible alternative to raising the retirement age. I don't agree with this. And the age should be raised, and the minimum insurance period should be increased (at least up to 25 or 30 years), and salaries should be brought out of the shadows, and the system of early pensions should be reformed, and a number of other measures should be implemented. Only in this way will the necessary significant effect be achieved. But the main thing is the positive development of the economy, without which there can be no good pensions.”
Nikita Ivanovich Maslennikov, director of the department of the Russian Union of Industrialists and Entrepreneurs and a leading expert at the Institute of Contemporary Development, also believes that we cannot avoid raising the retirement age.
“I see in such rumors a return to old ideas. Initially, it was assumed that our minimum work experience would be 15 years at once. I regard this news positively, such a reform is a positive factor for the economy, it will lead to a reduction in informal employment. Our people are accustomed to receiving “salary in an envelope”, and this turns into a risk for themselves. The minimum length of service leads to guaranteed pensions.”
Maslennikov also believes that pension policy will not be limited to just increasing the length of service. “As a separate law, this will not work, only in the context of rebooting the entire pension system as a whole. We must also accept the fact that we cannot get away from raising the retirement age. Demographic trends are now such that by 2020 the population of the Russian Federation will be reduced by 800 thousand people per year. That is, one can imagine how much of the able-bodied population we will lose and what burden of providing pensioners will fall on the remaining shoulders. Raise the age, of course, it is necessary in stages. That's about half a year a year, for example, until the retirement period becomes 65 for everyone. The same goes for the minimum work experience. Calculate a convenient coefficient and raise it in stages over 10-15 years. As part of a set of measures to improve the system, increasing the minimum work experience will give a result.”
Anton Valerievich Tabakh, chief economist at Expert RA, associate professor at the Higher School of Economics, believes that the retirement age will not be increased for political reasons. “Changes are needed because now we have a deficit in the pension system. Yes, the minimum length of service, I think, will indeed be raised. This is done so that people do not receive a social pension for poverty, but a good insurance pension. So that fewer people receive it, but not only on paper. Such a measure has been discussed for a long time, and I think they will begin to act after the 2018 elections. There will be a gradual reform, a mild increase in the minimum length of service.”
Sergei Alexandrovich Khestanov, Associate Professor at RANEPA and Advisor on Macroeconomics at the Otkritie Database, believes that the state is afraid to raise the retirement age directly. “They are afraid, so they are discussing an increase in seniority. The same with a different sauce. The downside that I see here is people who were looking for work in the 90s. Then rarely where they gave work books, so the experience was lost.
According to Khestanov, it is necessary to raise the retirement age in any case. “After the 1990s, Russia's demographics have changed. The birth rate is falling, the population is rapidly aging, life expectancy is increasing. There are fewer and fewer workers, the burden on the pension system is increasing. There are only two ways out of here: raise taxes or increase the retirement age. It is impossible for us to do even more taxes. What is, and so barely collect. The age remains. Most countries, by the way, have gone this way. The USA has a retirement age of 65 for everyone, Germany is about the same. And the tax burden on the Germans is immediately less than ours.”
Unfortunately, in Russia the population is "less conscious than abroad," the economist noted. “People there are calm about the reforms of the pension system, they understand that it is necessary. We have any conversation about raising the retirement age is very difficult. But “you can’t break your butt with a whip,” we won’t get away from this anywhere. ”
Khestanov stressed that the pension system of the Russian Federation is now in crisis. “The budget is scarce, the money that workers now earn is consistently not enough for retirement every year. This is both because the working-age population is getting smaller, and because oil prices have fallen. We can't do without reform."
The presidential administration and the government have found an alternative to the unpopular idea of raising the retirement age and are currently discussing the idea of raising the minimum work experience threshold that would make a citizen eligible for an old-age pension.
Vedomosti writes about this with reference to three federal officials.
According to the interlocutors, a sharp increase in the retirement age will not find a positive response from society and will not immediately give the necessary effect for the budget. Increasing the length of service, explains one of the sources of the publication, will encourage people to work longer and leave the gray sector, which will bring more income to the Pension Fund (PFR) and generally improve the country's economy.
When asked whether a completely new initiative would replace the idea of raising the retirement age, Vedomosti’s interlocutors did not come to a unanimous answer: one source says that the authorities will not drastically increase the minimum length of service, and in fact this will help delay pension reform, which in the end will still increase the retirement age of Russians in the future. Another source insists that an increase in the length of service for calculating an insurance pension will be able to replace an increase in the retirement age.
The federal official assured the publication that in the past two months there were no meetings on pension reform in the government, there was no consensus and no decisions taken by the authorities, presidential press secretary Dmitry Peskov added in a comment to the newspaper. Dmitry Medvedev's press secretary told Vedomosti that no meetings had been held at the level of the prime minister on this issue at all. The Ministry of Finance forwarded all questions to the Ministry of Labor, where, in turn, they said that no changes in the pension system were being discussed.
How much the authorities can increase the minimum work experience of Russians, the sources of Vedomosti did not specify.
Experts from the Center for Strategic Research believe that the increase in seniority will not solve the problem of pension reform. Yury Gorlin, deputy director of the RANEPA Institute for Social Analysis and Forecasting, emphasizes that at present the average work experience of Russians is already significant - 35 years. Tatyana Omelchuk, senior researcher at the NIFI of the Ministry of Finance, in turn, points out that only raising the retirement age will be able to change the ratio of the number of payers of pension contributions to pensioners. In her opinion, this measure will make it possible to halve the deficit of the pension system in real terms by 2030 and increase pensions by 30-40%.
Currently, men in Russia retire at 60, women - at 55. The head of the Ministry of Economic Development, Maxim Oreshkin, pointed out that the retirement age can be raised only if the level of pensions themselves increases and the quality of medical services improves.
Raising the retirement age has been discussed for many years, but the presidential administration and the government cannot decide on such an unpopular measure, despite all the problems of the pension system and budget. Now an alternative solution is being discussed, three federal officials told Vedomosti: to increase not the age, but the minimum work experience, which gives the right to an old-age pension.
A sharp increase in the retirement age will not support society, and a gradual one will not have an immediate effect on the budget, two officials say. We need to focus on increasing the income of the Pension Fund (PFR), one of them explains: the increase in seniority encourages people to work longer, so that later they can receive a higher insurance pension, and leave the gray sector - this will whitewash the economy and replenish the PFR budget. The issue of age has already faded into the background, other ideas are being discussed, another official joins. The government understands that raising the retirement age is politically inappropriate, it is better to increase the length of service, which will encourage people to come out of the shadows, another Vedomosti interlocutor confirms. But the length of service will not be sharply increased, he continues: in fact, this is a delay in the reform, and in the future the retirement age will inevitably have to be raised.
An increase in the length of service for calculating an insurance pension can replace raising the retirement age, another Vedomosti interlocutor believes.
But such a reform is possible only if the pension formula is changed and the pension is calculated based on the employee’s earnings for a certain period of time, he continues: the longer the length of service, the greater the share of this earnings will be the pension, regardless of age.
There is no single point of view on pension reform, just as there are no decisions made, says Dmitry Peskov, press secretary of the President of Russia. There have been no meetings in the government in the last two months on this matter, the federal official informs. At the level of the prime minister, they were not carried out at all, says Dmitry Medvedev's press secretary Natalya Timakova.
The representative of the Ministry of Finance forwarded the questions to the Ministry of Labor, the representative of the Ministry of Labor assured that no changes in the pension system were being discussed.
Now men in Russia retire at 60, women at 55. To receive an insurance pension, by this time they must have completed seven years of contribution to the pension system and earn the minimum number of pension points (now it is 11.4). The last two requirements are gradually increasing: by 2025, the minimum experience will be 15 years, and the minimum score will be 30.
Russia is one of the few countries in the CIS where the retirement age remains so low. For example, Belarus from January 1, 2017 began to increase it annually for 6 months - until it reaches 63 years for men and 58 years for women. The Ministry of Finance and the chairman of the Center for Strategic Research (CSR) Alexei Kudrin proposed raising the retirement age. Ministry of Finance - up to 65 years for both men and women - in increments of 6-12 months a year. The CSR, in the draft strategy for the economic development of Russia until 2024, proposed starting from 2019 to annually raise the retirement age by six months - up to 63 years for women and up to 65 years for men. This is one of the necessary conditions so that by 2035 the budget will not be under attack, Kudrin warned: the dynamics of oil and gas production will worsen, the demand for public services and public investment will grow, the population will age, money for pensions and medicine will be required by all more. No reforms in 2022–2050 Russia will have to increase spending on pensions and healthcare by 4.5% of GDP, the IMF estimated.
The Ministry of Finance, through raising the retirement age, expects to reduce the transfer to the Pension Fund from the federal budget, Yury Gorlin, deputy director of the Institute for Social Analysis and Forecasting of the RANEPA, knows. Draft budget for 2018–2020 already provides for a reduction in the total transfer from the federal budget (see chart). As for insurance pensions, they are already declining in real terms, the Accounts Chamber points out in its conclusion to the draft budget for 2018-2020: last year's indexation did not cover inflation in 2015, pensions for working pensioners from last year are not indexed at all. In the next three years, pensions will be reduced by another 1.6%, auditors of the Accounts Chamber warn.
About 50% of working pensioners continue to work because of the threat of poverty and are ready to retire if it is at least 40% of their salary, Lilia Ovcharova, director of the Institute for Social Policy at the Higher School of Economics, shares her calculations.
CSR experts also agree that it is necessary to reduce the number of applicants for early retirement, says Ovcharova. For example, those working in hazardous working conditions should be given the right to it, depending on the class of these conditions, to increase the requirements for seniority for workers in education and medicine, Omelchuk argues. It is necessary to increase the minimum length of service for “early workers”, the federal official agrees. “Earliers” “cost” about 30% of all expenses for insurance pensions, another federal official knows, but no one has a plan to reduce them, and increasing their length of service and age will raise questions from the Constitutional Court.
Increasing the length of service will not solve the problems of the pension system, the experts of the Center for Strategic Research agree. No matter how you increase the minimum length of service, this will not cut off a large number of pensioners, since the average length of service of Russians is now significant - 35 years, says Gorlin. The length of service is already being increased to 15 years by 2025, and returning to this issue earlier means creating unnecessary social tension, Ovcharova is sure. Raising the retirement age is the only thing that can change the ratio of the number of payers of pension contributions to pensioners, insists Tatyana Omelchuk, senior researcher at the NIFI of the Ministry of Finance: raising the retirement age for men and women to 63 years will halve the deficit of the pension system in real terms by 2030 and increase pensions by 30-40% compared to those that will be without an increase.
In fact, neither an increase in age nor an increase in seniority will give a quick effect, Gorlin believes: it can be achieved if, from 2019, we begin to significantly increase the minimum number of pension points: bring them not to 30, but to 70. This will reduce the number of those who made an insufficient contribution to the pension system, and from 2025 will provide the budget with savings of 100 billion rubles. and more, says Gorlin, it is also possible to further limit the payment of pensions to working pensioners, taking into account their income.
The social bloc of the government has long been proposing to limit pensions to wealthy pensioners, but this will only lead to an outflow of working pensioners into the shadows - it has already intensified after the freezing of indexation of pensions for workers, a federal official is skeptical.
Kudrin and officials who support him are confident that if the issue of raising the retirement age is constantly raised, people will have a “addictive effect” and they will come to terms with the inevitability, the federal official says. The attitude of Russians to this issue is now much better than six years ago, the former finance minister assured in June, referring to the results of the focus groups of the CSR. Proponents of raising the age are sure that "water wears away the stone" and after the elections they will get the government to make an unpopular decision, the official said. Raising the retirement age is painful, but it is even worse to violate the rights of working pensioners without indexing their pensions, another federal official says, but raising the age could become a new social contract between people and government.
Russians will have a desire to work longer and leave the gray sector
The authorities have found a way to make the Russians want to work more, and at the same time replenish the budget of the Pension Fund. According to the Vedomosti newspaper, the government has resigned itself to the fact that the idea of raising the retirement age, which has been increasingly discussed lately, is still unlikely to find understanding in society. Instead, the country may increase the minimum length of service to receive an old-age pension.
According to the Vedomosti newspaper on Monday, the Russian authorities are thinking about raising the threshold for the minimum work experience that gives the right to receive an old-age pension. This idea is now being discussed in the cabinet of ministers and the presidential administration, the publication claims. This newspaper was told by three federal officials.
The idea of increasing the minimum length of service came into the heads of officials to replace the idea of a sharp increase in the retirement age. The authorities resigned themselves to the fact that this measure would not be supported by Russian citizens. In addition, it was calculated that raising the retirement age in the short term would not have the desired effect on the budget.
A completely different matter is the increase in seniority, the interlocutors of the publication explain. According to one of them, thanks to this, the Russians will be interested in working longer and leaving the gray sector. This, in turn, will inevitably replenish the Pension Fund with additional income and improve the Russian economy as a whole.
Such a measure will avoid the need to sharply raise the retirement age, but its gradual increase will still occur. This opinion was expressed to the newspaper by another source. According to him, the discussed step will only slow down the pension reform, which will eventually raise the retirement age anyway.
Another interlocutor of the publication has a different opinion, who believes that raising the minimum work experience threshold for calculating an insurance pension will be able to replace raising the retirement age.
