What will happen to military pensions from January 1, 2021

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Rumors that the second pension for military personnel will be canceled from January 1, 2021 arose after the Ministry of Finance carried out an analysis of this benefit. It was decided to freeze the pensions of retired defenders of the homeland until the end of 2021. The measures, according to the Government, are related to the deterioration of the economy due to a new wave of sanctions.

• Indexation and receipt of a “second” pension benefit
• The procedure for calculating the second pension of a military personnel
• What will happen to military pensions from January 1?
• Long service pensions from January 1
• What did the president say about military pensions?
• Opinion of deputies on payments to military pensioners
• Will the changes affect working military pensioners?
• What can post-retirement retirees expect?
• Consequences of Government decisions
• Change in length of military service
• Conclusion

Indexation and receipt of a “second” pension benefit

Military personnel expect indexation of their second pensions at the beginning of 2019. The government has postponed the decision on the indexation of basic military benefits until the beginning of the second half of the economic half of 2021. It is known that only certain categories of military personnel will be able to receive the second pension benefit.

Many military personnel, after entering civilian life at the age of 45, find employment. A military pensioner participates in the compulsory pension system, transfers contributions to the Pension Fund through the official employer, and therefore has the right to a second pension, in addition to deductions from the Ministry of Defense. This is enshrined in Federal Law No. 400.

Military personnel who fulfill a number of conditions can count on the second benefit.

1. Registration with the Pension Fund of Russia.
2. Availability of insurance experience obtained in official work. From 2019, the mandatory length of service will increase from 9 to 10 years, and by 2024 it will be 15 years. The length of service may be less if the citizen worked in dangerous conditions or in the Far North.
3. Reaching retirement age. The indicator changes taking into account working conditions.
4. Accumulation of individual pension points. In 2021, the minimum will increase from 13.8 to 16.2 points. Until 2025, the required number will be 30 points.

If a citizen receives a disability or long-service allowance from the Ministry of Defense and earns a “civilian” pension, then the amount of financial income will double. Beneficial conditions are provided for military personnel who have been exposed to man-made harmful effects or have become disabled in service. Such people will receive subsidies before the age of 55 and 60.

The procedure for calculating the second pension of a military personnel

The second pension has been accrued since 2015, after the release of the law “On Insurance Pensions”. To calculate the benefit, the formula is used:

The cost of one point in 2021 was 81.49 rubles. The more points accumulated by a former military man, the higher the amount of pension benefits will be. To increase the amount of points, you can extend your insurance period or strive for a salary increase.

The military insurance pension differs from the civilian benefit: it does not include a fixed payment ( RUB 4,982.90 The system is not entirely fair, since with an equal amount of points, a civilian will receive a larger insurance pension than a former military man due to the presence of a fixed increase.

Despite this, many citizens express dissatisfaction with the double benefits provided to military pensioners. However, it must be remembered that military personnel protected in war and peacetime. In fact, the payment turns out to be small and deserved by length of service and work activity.

When will the pensions of military pensioners be increased in 2021 and by how much?

As already noted, in 2021, the pension for military pensioners will be increased from October 1, 2021 by 6.3%. This increase will be made due to the indexation of the pay of military personnel and persons equivalent to them (Ministry of Internal Affairs, the National Guard, the Federal Penitentiary Service, etc.) by 4.3% and additional indexation by 2% (by decision of President V. Putin) due to an increase in the reduction coefficient from 72.23% to 73.68% from October 1, 2021.

According to the RBC news agency, Deputy Minister of Defense Tatyana Shevtsova stated that the average salary of an officer at the level of battalion commander (lieutenant colonel) in 2021 is 88.7 thousand rubles, a lieutenant, platoon commander - 66.1 thousand rubles. etc. Accordingly, in 2021 they will be increased by 4.3%, and consequently, the size of the pension provision for military pensioners will increase, which in addition will be increased by an additional 2% .

• Funds to increase pensions by 2% above the inflation rate, as provided for by Presidential Decree No. 604 of May 7, 2012, were not initially included in the federal budget for 2021. by only 4.3% in 2021 (that is, only according to the forecast inflation rate). But in accordance with the President’s statement of October 25, 2021, an additional increase of 2% will be carried out . The draft federal budget for 2019-2021, containing the President’s amendment, was adopted by the State Duma in the third reading on November 21, 2021. It was approved and signed by the President was 11/29/2018
• The Government planned to “freeze” the amount of the reduction coefficient to the amount of monetary allowance taken into account when calculating military pensions for another year - until January 1, 2021 . But V. Putin introduced an amendment to the law, according to which the coefficient will be increased from October 1, 2021. This means that from October 1, 2019, the pension payment for the military will be determined as 73.68% of the monetary allowance.

What will happen to military pensions from January 1?

The decision on the issue has been postponed by officials until the beginning of the second half of the economic half of 2021. But it is known that they are planning to change the accrual principle: instead of “length of service” they are introducing a “social package” . This is perceived negatively by citizens. After the introduction of the social package, they promise to pay severance pay to military personnel who retired while young.

Under the current system, a pension is due after 20 years of service. The introduction of a social package will allow those citizens who, due to health or circumstances, were forced to end their military career to receive a pension.

The abolition of pensions threatens that retired military personnel will have to look for civilian work. Adaptation to ordinary life after several years of service is difficult. Citizens will receive a one-time payment, but this will not solve the problem. Some of them will find work at universities and undergo professional retraining.

Long service pensions from January 1

Officials planned an increase in military pensions based on length of service from 2012 to 2023.

For example, it was planned to increase the pension of a regiment commander to 35,769 rubles, a lieutenant colonel to 24,897 rubles, and a warrant officer to 14,079 rubles. This calculation was made with stable GDP growth.

Now sanctions have come into effect, the cost of energy resources is not growing. According to economists, GDP growth in 2021 will fall short of forecasts and will amount to only 1.4%. Foreign investors who want to invest in opening production in Russia do not have the opportunity to do so. Thus, the government loses the opportunity to fulfill promises.

Thus, military personnel will have to be content with the assigned benefit, since workers in other fields will receive a pension only upon reaching a specified age.

Reduction factor for military pensioners in 2021

Simultaneously with the submission of the draft federal budget to the State Duma, the Government prepared and introduced bill No. 556372-7, according to which the amount of monetary allowance taken into account when calculating a military pension should continue to be used using a reduction factor .

In its draft, the Government proposed to “freeze” the value of this coefficient at the level of 2021 and 2021 - i.e. in the value of 0.7223 (72.23% of the allowance amount) .

But President V. Putin introduced his own amendment to the law, according to which from October 1, 2021, the coefficient will be increased from 72.23% to 73.68% (by 1.45%). Due to this, military pensions will be additionally increased by 2% (0.7368 / 0.7223 = 1.02 - i.e. 2%)

In fact, this means that payments to military personnel and persons equivalent to them will be increased by 2% by adjusting the reduction factor from October 1, 2021. In addition, the increase in 2021 will be carried out by increasing the salaries of military personnel by 4.3%.

The corresponding bill on the reduction coefficient was adopted by the State Duma in the second reading on November 20, 2018. The final content of the bill was approved on November 22 during the third (final) reading. On December 11, 2019, it was signed by President V. Putin.

For reference

Article 43 of Law No. 4468-1 of 02/12/1993 establishes that from January 1, 2012, monetary allowance when calculating pension benefits is taken into account in the amount of 54%, and from 01/01/2013 this standard increases annually by 2%, until will not reach 100% . Federal laws may establish an annual increase in this coefficient by a larger amount (more than 2%) depending on the level of inflation, therefore, starting from 2015, the following reducing coefficients were applied to the amount of monetary allowance:

• from 01/01/2015 - 0.6212 (62.12%);
• from October 1, 2015 - 0.6678 (66.78%);
• from 02/01/2016 - 0.6945 (69.45%);
• from 02/01/2017 - 0.7223 (72.23%);
• from 01/01/2018 - 0.7223 (72.23%).

Thus, the last time the reduction factor was adjusted was from February 1, 2021, when it was set at 0.7223 by Law No. 430-FZ of December 19, 2016. Starting from 2018, the required increase in pensions due to adjustment of the reduction factor was not carried out (as of 2021, by Law No. 365-FZ dated December 5, 2017, the coefficient was set the same as in 2021 - 72.23%). According to Government Bill No. 556372-7, this approach was planned to be maintained for 2021 , but by decision of the President, the coefficient will be increased from October 1, 2021 to 73.68% .

Opinion of deputies on payments to military pensioners

The relevant Duma committee responsible for defense actively opposed the freeze. To maintain correct payments, it was necessary to index by 5.2% within the framework of real indicators. Some committee members openly stated that the government completely ignored the decree on increasing payments to military personnel.

But the bill still made it to the Duma. The discussion was active, the project was sent for revision several times. The number of votes required for adoption was reached after 3 readings. The document came into force.

What can post-retirement retirees expect?

Benefits will not be canceled for current pensioners; even if the planned law is adopted, it will not affect them. Of course, the state will not deprive citizens who have reached the age of 65 of benefits and then send them to work.

In case of cancellation, all concerns about the employment of former military personnel will be entrusted to the state. There are no jobs available for this category of citizens. The education of most military personnel is specific. At the same time, they lack skills in pedagogy, economics, finance and other areas. Professional retraining and obtaining new education will become very problematic if there is a shortage of places in educational institutions.

Consequences of Government decisions

Reducing the amount of state support for military personnel lowers the authority of the Russian army and reduces the attractiveness of military professions.

Military pensions are paid to employees of the Ministry of Defense, employees of the Ministry of Internal Affairs, the Ministry of Emergency Situations, the FSB and other “siloviki”. If early pensions are cancelled, the proposed “severance” pay may be enough for 1-2 years, but most likely less. During this time, you will have to adapt to life in civilian life and find another job.

The government plans to save about 500-700 billion rubles a year on the reform. What do experts say about innovations?

• According to some experts, the abolition of pensions will not happen, since it is unprofitable for the state, and a crisis will arise in the security forces. Military units, criminal authorities, and employees of the internal affairs department have great weight in the structure and politics of Russia. They will not support the new law.
• A number of experts believe that the wave of talk about the complete abolition of benefits was provoked so that employees would calmly make the decision to “freeze” pensions.

The possible abolition of pensions is a pressing issue.

For example, in India only civil servants receive pensions. In Russia, one should not expect the abolition of military pensions, so the Government proposes to carry out indexation by increasing length of service.

Consequences of the abolition of military pensions.

After the abolition of military pensions, some of the people who agreed to devote their lives to the army will choose a different path. In addition, the authority of the Russian army will decrease significantly.

Currently, military pension recipients are the following employees:

• FSB,
• Ministry of Emergency Situations,
• Ministry of Internal Affairs,
• other law enforcement officers.

If the innovation is adopted, the military one-time payment will be enough to live for 1 or 2 years without working.

It is planned that this time will be quite enough to adapt to ordinary life, in which there is no military regime. In addition, about 600 billion rubles will remain in the country's budget annually.

Expert opinions.

Experts believe that the state will still continue to pay military pensions. People serving the Motherland are the most important for the country. It is unlikely that any of these people will advocate such innovations.

The state understands perfectly well that it is very difficult to resist so many people who are significant to it. Experts also suggest that a crisis will come in the security sectors, and this cannot be allowed in the conditions of today’s foreign policy.

In this regard, there is reason to assume that there will be an increase in pensions for military pensioners , and not its abolition.

Other experts, analyzing this issue, start from the fact that the bulk of the military pension has been frozen. In this regard, a wave of negativity swept across the country.

If the military is told about the complete abolition of pensions, the freeze will not seem so scary, and all the attention of the population will switch to the risk of cancellation.

The main law of humanity applies here: in order to make a person happy, you must first take everything from him, and then return at least a quarter.

There is reason to assume that if the military pension is cancelled, the entire population, and not just the military, will react to this. After all, if such significant sections of the population are deprived of their pensions, then what can we say about civilians. This means that this could threaten the abolition of pensions in general for everyone.

Experience of other countries.

There are quite a lot of countries that have no pension at all. The population works exactly as long as it is physically able to do so. In some countries there is not even a lump sum benefit paid in connection with old age.

There are no pension payments in:

• Afghanistan,
• Thailand,
• Iraq,
• India,
• China (if the employee does not work with registration).

Change in length of military service

The option of increasing the length of service of military personnel from 20 to 25 years may help solve the problem of increasing benefits. Extending the mandatory service life will cover the costs of indexation. There will be an increase in the average benefit amount with a decrease in the number of individual payments. In addition, increasing the length of service will reduce the overall need for personnel.

They plan to leave a term of 20 years for military personnel with disabilities, serving with an age limit for service. This pension reform is planned for 2021.

Legislative regulation of military pensions for military personnel

These payments are made not through the Russian Pension Fund (PFR), as for civilians, but from the budget of the Russian Ministry of Defense. The main provisions are determined by Law No. 4468-1 “On pensions for persons who served in military service” dated February 12, 1993.

There are pensions:

• For length of service . The most common type of government support for the military. To be appointed, a citizen must meet legal requirements - serve in the ranks of the Armed Forces of the Russian Federation (AF) for at least 20 years or have established reasons for resigning.
• For disability . It is prescribed to persons who have received limited capabilities due to injury or illness received while serving in the RF Armed Forces.
• For loss of a breadwinner . Recipients of this type of pension are members of the family of a deceased military man.

How are they calculated?

Pension benefits for military personnel are calculated taking into account length of service, rank and the amount of cash allowance (SDS) that the citizen had in the service.

For example, for those transferred to the reserve:

Officers' salaries are indexed to combat inflation - this is also reflected in the amount of pensions.

The law also introduced additional payments to the state support of retired military personnel. For example, if a citizen has dependents, the total payment will be increased by 32–100% (if there are three or more of them).

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The remaining two types of pensions have the following features:

• For disability . Depends on the assigned category and the reasons for the disability. For example, persons who became disabled group I during hostilities receive a pension - 85% of the allowance.
• For loss of a breadwinner . The amount of payments is regulated by the cause of death of the serviceman. The maximum amount is due to dependents of those killed in service - 50% of the amount of monetary allowance.

How are they different from civilians?

According to current legislation, a military pension is awarded to persons:

• Those with at least 20 years of service in the Armed Forces or equivalent structures. These are the Federal Penitentiary Service, the Ministry of Internal Affairs of the Russian Federation and other law enforcement agencies.
• Dismissed from the ranks of the RF Armed Forces upon reaching the age limit.
• Those who retired due to health reasons or due to organizational and structural changes, and have reached 45 years of age. In this case, a total of 25 years of experience is required, of which at least half is service in the army, navy or law enforcement agencies.

In addition to the existing military state support, a citizen, having retired, according to the law, can then accumulate insurance experience. Then he becomes entitled to a second pension - according to age.

Changes in 2021

The upcoming reform project considers the following options:

• Replacement of state benefits for length of service with a one-time social package. Its size will be comparable to pension payments for several years. According to the developers of the reform, these funds are considered not as compensation for canceled payments, but as assistance when leaving military service and looking for further work. At the same time, retirees receive the right to free retraining in a new specialty and assistance in finding employment.
• The definition of pension is not based on length of service, but upon reaching a specific age (as for civilians).
• Increasing the length of service to obtain the right to a pension from 20 to 25 years with a change in the payment structure. Their maximum amount will be 95% of the salary (persons with 35 years of service experience can receive it).

These changes are currently under development. The first three proposed options are radical, and the last one acts as a gentle alternative, so it is preferable for future retirees.

In order for the reform of military pensions to take place, it is necessary to prepare a bill, consider it by the Duma and adopt the corresponding normative act. This takes from six months to a year and a half, so the earliest date for introducing new rules for state support for retired military personnel is 2020. It is also possible that the corresponding bill will not be prepared or rejected, and the payment system will remain the same.

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