Concerns every worker: what parts does a pension in Russia consist of?

How is a Russian pension calculated? What parts does a Russian pension consist of?

This question worries very few people at a young age, but every year, as the length of work experience increases, every worker wants to know a detailed answer to it.

The procedure for calculating the amount of benefits from the Russian pension fund is ambiguous and, moreover, is changing due to the ongoing crisis in the economy.

Let's look at how the old age pension is formed and touch on the issue of social security for disability.

How is the old age pension calculated?

In every state, including Russia, there is an age established by law for a worker, upon reaching which he may not work and receive social benefits for his maintenance. However, the amount of payments in each individual case depends on many factors:

• pensioner's age
• length of work experience
• earned income from which contributions were made to the pension fund
• working conditions

In addition, when calculating the amount of this type of social benefit, the inflation rate is taken into account.

Size of the base for certain categories of the population

The amount of the basic component of the pension depends on many factors, so its size is calculated taking into account the category of citizens applying for benefits:

1. How much is it today (minimum) - as a result of indexation in 2021, the basic component of the pension was adopted in the amount of 4982.9 rubles, which is equivalent to the minimum pension in the Russian Federation.
2. For law enforcement officers , military personnel are not eligible for a basic pension, since the calculation of pension benefits is carried out in a slightly different way than for civilians, taking into account allowances, length of service and the amount of monthly allowance. Their pension is indexed and increases annually. The minimum pension amount cannot be lower than the basic component at the time the serviceman receives it.
3. For disability - the size of the base depends on several criteria, including the disability group. The minimum is 9965.80 rubles, and if there are dependents on support, it increases to 14948.71, taking into account the number of dependents. If a disabled person is not able to care for himself, the minimum amount increases to 21,622.98 rubles, and if he works in the Far North - 14,948.71 rubles.
4. In the regions of the Far North , difficult working conditions guarantee an increase in the basic component of the pension, taking into account length of service. The minimum amount is 7474.35 rubles, and if there are dependents, this amount increases by 30% for each dependent.
5. If there are dependent dependents , the pension supplement is provided for a maximum of 3 people and depends on which category the recipient belongs to. For residents of the Far North, the premium is 50%, for regions equated to the North - 30%, in the absence of any benefits or subsidies - 50%.
6. For officials - fixed pension payments are due to a civil servant only if he takes out an old-age pension. In other cases, pension calculation is carried out individually, taking into account the position held, salary and benefits.
7. For working pensioners - if the pensioner continues to work, the law secures his right to receive a basic pension. However, this amount is not subject to indexation. Only after full retirement will its amount be recalculated taking into account the minimum in the region.
8. For veterans of the war in Afghanistan , the base is calculated upon reaching retirement age (old age) or disability. In other cases, the size of the pension depends on the position held, as well as benefits provided by the state.
9. For individual entrepreneurs - if an individual entrepreneur makes contributions to a pension fund, upon reaching retirement age he can qualify to receive the basic component of the pension.

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Two parts of pension

Over the course of their lives, Russians gradually earn themselves a labor pension, constantly deducting contributions to the Pension Fund from their income for performing work duties. From these contributions, 2 parameters are formed that are included in the old-age labor pension: its funded and insurance parts.

Ultimately, with increasing length of service, a certain amount of finance accumulates, which were transferred separately to the savings and insurance personal account of a particular employee.

Let's take a closer look at how the old-age pension is formed and what parts it consists of. The insurance share of the pension is formed from part of the contribution that employers transfer for their workers according to the established tariff.

A larger percentage of the pension fee is spent on financing in the solidarity system than on the savings fund. There is a legally approved pension fee - 22% of the salary before tax deductions.

The contribution is divided into parts depending on the age of the employee. If his year of birth was before 1967, then 16% is collected by a personal account in the Pension Fund insurance system. The balance of 6% goes to the solidarity part of the tariff.

For all other workers who were born after 1967, the contribution is broken down into accounts as follows:

• 6%—to a joint account
• 10% - to an individual account
• 6% – for the formation of the personal accumulative part of the tariff

Accordingly, for those born in 1966 and earlier, the amount of benefits is calculated depending on the amount of contributions made for them.

The funded part is mandatory for all citizens who were born since 1967. A share of the contribution goes to the pension fund of the citizen’s choice.

The assets of this fund are formed from such shares. They are invested in investment projects. The management company, which signed the PRF cooperation agreement, manages the finances.

To increase the size of the funded part of the pension, you can, at your discretion, contribute not only the mandatory 6%, but also additional amounts.

To form an accumulative pension capital, you need to submit a corresponding application to the Pension Fund. In case of refusal of further participation in the funded system, funds already transferred to the individual account can be withdrawn as a single payment immediately or as an urgent funded pension.

You can also accumulate funds while earning work experience in a non-state pension fund, which a citizen can choose independently.

Insurance experience

After the collapse of the USSR on the territory of the Russian Federation, changes in the calculation of time worked by a citizen changed repeatedly. Until 1998, Russia used the legacy method of calculating years worked to calculate pension benefits.

The amount of payments was calculated according to two parameters:

• total working time
• average salary, which was determined either for the two previous years of work, or other continuous five with the highest amount of labor income

Pension legislation
Since 1998, pension legislation has changed several times, therefore, from January 1, 2015, this procedure for calculating working time for a pensioner was radically changed.

And now, due to the fact that Russians earn it throughout their working lives, when determining insurance benefits, the periods of their work history are taken into account differently.

For those who officially worked before January 1, 2002, their existing pension rights are reassessed, using the method of recalculating length of service into monetary capital.

To do this, use one of the two points 3 or 4 described in Art. 30 of Law N 173-FZ “On Labor Pensions in the Russian Federation” dated December 17, 2001. One or another calculation option is used based on receiving a larger amount of social benefits.

When selecting the fourth item, the total number of years worked includes the following periods:

• specialty training at a vocational school or technical school
• acquiring professional skills at training courses
• obtaining higher education or an academic degree
• care for a citizen with disability group I according to the conclusion of a medical commission
• maternity leave
• maternal care for an infant up to 1.5 years (in total no more than 6 years)
• wife living with her husband in his service area, where there is no work in her specialty (without duration limitation)
• the period of stay of the spouse with the diplomat in the country where he was sent in the absence of the opportunity to work for her (maximum 10 years)
• all days of unjustified arrest, imprisonment or exile of a person during periods of wrongful criminal prosecution

There are still some periods before 2002 that are included in the number of days of service worked and are converted into pension capital, taking into account the increasing coefficient. These include the following.

A coefficient of 1.5 is applied for the following circumstances:

• involvement in the liquidation of the exclusion zone after the accident at the Chernobyl nuclear power plant
• performing work duties in the climate of the Far North

Coefficient 2 is used when taking into account the following years:

• work at enterprises, imprisonment in a concentration camp, residence in besieged Leningrad during the Second World War
• performing military duties in connection with conscription

Coefficient 3 is taken into account in the presence of the following factors:

• army or partisan service during hostilities
• time of treatment in hospital due to injury while performing military duties
• serving in the army on the territory of the exclusion zone of the Chernobyl nuclear power plant
• fulfilling production duties in besieged Leningrad
• period of imprisonment or serving a sentence due to wrongful criminal prosecution

In those cases when, according to the method of paragraph 3 of Art. 30 FZ-173 establishes a large amount of total capital for the purpose of a pension; all of the above non-insurance periods are included in the total number of years of work experience either in calendar order or are not taken into account at all.

Before the beginning of 2015, the approved minimum years of work experience was 5 years. New rules have now come into force. This parameter will gradually increase annually by 1 year, starting from 6 years in 2015, until it reaches 15 years in 2024.

If a Russian does not have the required number of insurance years to assign a benefit, then he will be paid a minimum social pension. It has a fixed value, which is slightly lower than the insurance amount.

You can increase the size of your pension if you do not apply for it upon reaching the age specified by law and later leave your workplace. Each subsequent year of work will bring an increase to the amount of this benefit.

Note! Official length of service is confirmed only by work records entered on the pages of the work book. This number of working years may not be sufficient to determine the amount of pension payments. If an employee works unofficially under current conditions, then such length of service will not give him the right to a labor pension in old age.

The amount of earnings also has a special impact on the amount of payments. At an enterprise, it is now possible to earn a minimum length of service with a large salary and receive a higher benefit than a low-paid worker who has officially worked honestly and conscientiously for 35 years of his life.

Insurance pension: who is entitled, how to apply

Let's face it: Most people don't care much about retirement. If old age is still far away, it seems like a matter of the future, which can always be postponed until later.

At the same time, everyone wants to have enough means of subsistence in old age so as to be less dependent on the vicissitudes of fate. But this can be achieved if you take the necessary measures now, without waiting for retirement age.

It is at least useful for future pensioners to understand how the pension system is structured and what nuances there are in modern legislation. The most common questions: what are funded, insurance and social pensions, what is the difference between them, how to draw up documents.

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In this article we will go into detail about everything you need to know about it.

How does salary affect

Since 2015, workers have been given the opportunity to independently choose which benefit option they want to receive from two completely separate types of labor pensions:

• insurance
• cumulative

These funds are formed in completely different ways. The insurance pension fund is created in a solidarity system from contributions from workers, which are used for current payments to the generation of pensioners. The funded type of pension budget is also formed from contributions, but does not participate in the current payment of benefits to pensioners, but is directed to investment in financial markets. The insurance type of pension increases due to state indexation, but the funded type does not

The share component of the insurance pension, which often exceeds the fixed basic amount of this type of benefit, in the future depends on the amount of the contribution paid to the solidarity fund. Moreover, for Russians officially employed in production, fees are also paid by their employer.

As for the self-employed part of the population (notaries, lawyers, individual entrepreneurs, etc.), they pay all contributions for themselves.

Note! All fees paid for the worker are reflected in his personal account in the PRF. Subsequently, for calculating the amount of the insurance type of pension, these data are the main ones.

You should know that the annual amount of funds paid to the insurance Pension Fund for each worker is affected by his age. For example, in 2010, a certain tariff was established on the levy for workers born in 1966 and earlier, in the amount of 20% of their earned income.

At the same time, workers born in 1967 and younger had to deduct 14% of the amount of accrued earnings. Every year the tariff is revised by the Russian authorities.

From the transferred funds, the share of the insurance part of the labor pension is separated, which is used to create an estimated pension capital. The size of the fund is annually indexed by a coefficient approved by the Government of the Russian Federation. These financial resources are used to pay three types of labor pensions:

• dependents upon loss of their breadwinner
• senior citizens upon reaching a specified age
• people with disabilities

In the process of determining a pension for a Russian citizen, when he reaches the age approved by law, the entire base capital from the contributions paid is distributed over the months in the expected period for the payment of insurance benefits. To do this, divide the total number of all insurance fees paid by 228 - the number of months in the expected period for paying pensions.

Differences in calculating insurance and funded pensions

How to influence your pension
With the advent of 2015, changes regarding the calculation of the insurance and funded parts of pensions came into effect.

Now the insurance share should be calculated not in ruble banknotes, but in points (coefficients).

In the future, when calculating the pension amount, it must be recalculated into ruble currency.

The cost of points will be approved annually by the Russian authorities and will increase according to the percentage of inflation.

When you retire, all points earned will be totaled and then multiplied by the set price.

To the final value you must also add the guaranteed amount, which is assigned by the state in a fixed amount (basic pension).

The result is the final amount of insurance benefits for an elderly citizen who has become a pensioner. There are special points that are assigned to a pensioner for uninsured periods of service:

• military conscription
• in connection with caring for a child under 1.5 years old
• service for a child with a disability or a citizen who has lived over 80 years

So, the right to an old-age pension is given to persons who have the required age, number of years of work and minimum scores established annually by law.

Insurance old-age pension from 2021

To assign such a pension in 2021, the following conditions must be met:

1. a citizen must reach the retirement age of 61.5 years (men) and 56.5 years (women), and the age for civil servants is 61.5 and 56.5 years;
2. a citizen must have at least 12 years of insurance experience;
3. the value of the individual pension coefficient (IPC) (total amount of pension points) must be at least 21.

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The cost of one pension point in 2021 (from January 1) is 98.86 rubles.

The amount of the fixed payment from January 1 of the same year is 6044 rubles 48 kopecks.