Presidential Candidate Putin Boldly and Unpinishedly Deceived All Russian Pensioners

The Ministry of Health and Social Development and the Pension Fund prepared draft of pension reform which the president Dmitry Medvedev already studied. The draft of the Concept of development of pension system till 2050 will be basis of pension reform of 2014 planned by department. The Ministry of Health and Social Development should present final version in October, till the end of 2012 all the reform should be approved by the president, "Kommersant" writes.

A lot was said about lameness of the Russian pension system, ex-Minister of Finance Alexey Kudrin even compared it to a financial pyramid so the need of reform ripened long ago. However the authorities set to it only after elections.

Though publicly officials speak against increase in a retirement age and elected president Vladimir Putin in his pre-election theses promised not to raise it, the draft of the reform provides its alignment for men and women and increase in long-term prospect. That is if now women retire in the age of 55 years and men - in 60 years, by 2047 retirement age for all will be equal and will make 65 years.

It’s offered to raise a level step by step. For women starting from 2015 retirement age will be lifted to 60 years by 2029. The softest increase in retirement age for men and women is provided at the following stage of the reform at preservation of predicted demographic tendencies: since 2030 – up to three months in a year, since 2036 – up to six months. Thus by 2047 increase will be complete.

Citizens should save for pension, “Vedomosty” reports in a headline of one of the articles on the subject. The Ministry of Health suggests to create three-level system "taking into account experience of the leading countries of the world" - obligatory state, corporate and voluntary funded. By calculations of the ministry, the worker forming pension within 30 years at the expense of all three levels will receive about 70-80% of the lost earnings staying on pension.

Now obligatory state pension is formed at the expense of contributions to the Pension Fund which rate makes 22%. Those who were born in 1967 and later have this figure shared as follows: 6% are directed for funded part (funds are invested for future payments); from other 16% (they go on payments to present pensioners) 10% are considered on the individual account of the worker and forms volume of his future pension rights and 6% go to solidary part and doesn’t influence the volume of pension rights.

Those who were born in 1966 and earlier have no funded part, 16% of 22% are being directed on the individual accounts, the same 6% go to the solidary part.

The Ministry of Health suggests to leave rate of pension contributions at present level - 22%, but to reduce funded part to 4%, to cancel individual part of tariff and to direct contributions completely to solidary part. Thereby the volume of contributions won't influence directly the volume of the pension rights, instead of a principle "you receive what you have paid" the Ministry of Health offers new formula based on experience and earnings.

It is planned to enter several categories of track record. For example, minimum which will raise from 5 to 15 years will be necessary for getting social pension. Working experience in 30 years for getting pension in 40% from the lost earnings will be necessary for citizens who were born before 1967 year. For those who were born after 1967 - working experience in 40 years will be necessary to receive pension not less than 45% from salary.

For calculation of pensions the department suggests to establish standard experience in 40 years for women and 45 years for men. Thus the Ministry of Health recognizes that "it’s practically impossible to develop such duration of the working experience by 60 years" - so its head Tatyana Golikova directly writes in her letter to the Prime Minister Vladimir Putin. Therefore it should stimulate later retirement without increase of the retirement age.

But if the worker wishes to retire in 55-60 years and will continue to work his pension won't be recalculated. "The pensioner will make a choice between receiving incomplete pension during the period he continues to work and possibility of getting full size pension", - the minister writes.

The earnings will be calculated as a ratio of the salary of the worker for entire period of work to an average salary across the country for the same period increased by the amount of average earnings across the country for the last quarter before pension charge. Not nominal one being considered by the Russian Federal Service of State Statistics but the one from which the Pension Fund received contributions (in formula till 2002 to which, in fact, the Ministry of Health suggests to return this earning was twice lower than average one). At that there should be restrictions for highly paid workers, the department specifies.

The Ministry of Economic Development and Trade and the Ministry of Finance don’t support offers of the Ministry of Health considering stake at distributive system dangerous: already by 2030 proportion between the population at retirement and able-bodied age will grow from 37% to 54%. Experts say that the workers with low wages will suffer as a result of such reform: their pension at any working experience will be equal to a living wage. As a whole, new formula will lead to decrease in the size of average pension in the country.

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