Putin's Version of Pension Reform Would Cost Russia 500 Billion Rubles
OREANDA-NEWS Pension reform after the presidential amendments will give a negative financial result for the state. This information President Vladimir Putin said at a meeting with the government on Tuesday, October 2. The government must find funds in the Federal budget to Finance these changes, Putin said.
"Another very sensitive issue: when planning the pension reform, the government proceeded from the fact that there will be a positive financial result for several years from these measures, but after the adoption of the presidential amendments it became clear that there will be no income from these measures to change the pension system, but, on the contrary, the government will have to finance the presidential amendments," Putin said.
Initially, the government planned that the reform would be neutral for the budget system until 2024: all the savings from raising the retirement age (reducing the cost of payments of newly appointed pensions) will go to an additional increase in current pensions.
Savings from raising the retirement age in 2019-2024 will exceed 3 trillion rubles, and all these funds will be used to increase the indexation of pensions, said labor Minister Maxim Topilin on August 21. But adjustments to Putin, announced late August, has reduced the potential savings by 0.5 trillion rubles for six years. To increase pensions, so as to increase the average old-age pension to 20 thousand rubles, it is still planned to spend 3 trillion rubles.
On September 27, the state Duma approved the bill on raising the retirement age in the third and final reading, taking into account all the presidential amendments. The main change that Putin proposed was to increase the retirement age for women from 55 to 60 years, rather than 63 years, as the government proposed. But this easing will not affect the budget savings in the next six years.
For the period from 2029 to 2035, the shortfall in income of the Pension Fund compared with the initial government scenario will be 3.6 trillion rubles, noted Golikova.
The concept of the pre-retirement age after the adoption of the President's amendments will increase from two to five years for retirement during the transition period of the reform. To protect people of pre-retirement age, the President proposed to increase their unemployment benefits to 11,280 rubles, as well as to introduce criminal liability for employers for dismissal or refusal to hire pre-pensioners. The relevant amendments to the criminal code were approved by the state Duma in the final reading on September 25.