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Pensions for military personnel are calculated completely differently than insurance pensions. Their value is based on a person’s salary and is proportional to length of service. Therefore, it is possible to start receiving such a pension much earlier than a regular one. The recipient of such a pension has the opportunity to get a job and accumulate pension points to receive an insurance pension.
How is pension calculated for former military personnel?
According to Art. 43 of the legislative act of February 12, 1993 number 4468, the amount of payments to former army employees and their relatives is determined by taking into account monetary allowances. In addition, the size of the pension depends on:
- salary;
- ranks;
- length of service;
- indexing.
Pension coverage for army employees is divided into 4 types:
- For 20 years of service.
- For 12.5 years of service, with the recipient’s total experience of at least 25 years.
- For the loss of a breadwinner for disabled relatives: sons/daughters; mother/father with a disability or retired; a wife who is caring for a child under fourteen years of age.
- Due to disability that occurred during military service or due to illness during this period.
Salary is the salary of an army employee, including salary and allowances. According to Art. 2 of the legislative act of November 7, 2011 number 306, military personnel receive bonuses for:
- length of service - 10-40 percent of salary every month;
- rank - 5-30 percent;
- access to classified information – up to 65 percent;
- service under special conditions; performing tasks that are dangerous to life and health; achievements in service – up to 100 percent;
- conscientious performance of official duty - up to 300 percent of the annual salary.
Calculation algorithm
The initial value is taken as the salary of a military personnel. Then a bonus for the rank is added to it, the resulting result is multiplied by the bonus for length of service. The result obtained is added to the sum of the salary and bonus for the rank. This forms the basis for calculating pension benefits.
The base is multiplied by an adjustment factor (depending on length of service) and a reduction factor. The product is then multiplied by the district index. The result obtained will indicate the size of the military pension.
Indexation of military pensions in 2021; latest news for May 17
According to the current legislation, military pensioners are not paid a full pension, but only a part of it. This is due to the application of a reduction factor to the amount of cash benefits when calculating the payment. It was first introduced in 2012 at a rate of 0.54, subject to a mandatory annual increase of at least 2%. However, it was recently changed from 0.7223 to 0.7368 on October 1, 2021.
To calculate how much the second pension will increase for civil servants and law enforcement officers in 2021, multiply the amount received in 2021 by 1.063. For example, if the amount of the pension contribution was 5,000 rubles, then from January 1 it will increase to 5,000 × 1.063 = 5,315 rubles.
Military pensioners are entitled to bonuses, some of which are determined by the estimated pension amount (PP). The calculated amount is considered the amount of the old-age social pension provided for in paragraphs. 1 clause 1 art. 18 of Law No. 166-FZ of December 15, 2001. The amount of this payment is indexed annually, so the corresponding additional payments to the military pension are also recalculated.
Military pensioners can count on a planned increase in pensions in 2021. In the draft law on the federal budget for 2021, about 9.3 billion rubles are reserved for these purposes. According to the latest information from the State Duma, military pensions will be increased in 2021 as part of the planned procedure for indexing salaries by positions and ranks, taking into account which the size of the pension is calculated. When will pensions for military pensioners be increased in 2021 and by what percentage is valorization expected, find out in the latest news from our article.
- Reaching retirement age at 45 years.
- Dismissal from the armed forces for the following reasons: reaching retirement age; reorganization of the military unit; health problems.
- Total work experience of at least 25 years, of which at least 12.5 years were in military service.
- You can receive a military pension without meeting these requirements. But for this, a citizen must have at least 20 years of military service.
Bill in 2021
Last fall, the government submitted to the State Duma legislative draft number 556372-7 on prolonging the “freeze” of the reduction coefficient for another 2 years at a value of 0.7223. In other words, the government proposed to continue to calculate the military pension as 72.23 percent of the salary. The State Duma adopted the bill in the 1st reading, November 8, 2018.
For the 2nd reading of the legislative draft, which took place on November 20, 2018, adjustments were prepared and approved, which were made by presidential decree. On November 22, 2018, the State Duma adopted an adjusted bill.
According to this bill, the indicator 0.7223 will be used to calculate military pensions only until 10/01/2019. From this date the indicator will increase to 0.7368. Consequently, pension provision will be calculated as 73.68 percent of salary.
From 10/01/2019, pension benefits will increase due to a modified reduction factor. In addition, pensions for former military personnel, police officers, employees of the Ministry of Emergency Situations, the National Guard, and the Federal Penitentiary Service will be increased through indexation by 6.3 percent.
Reference! After its introduction on January 1, 2012, the reduction factor was equal to 0.54. Then this figure was to increase annually by 2 percent until it reached 100 percent. However, in fact, the last time it changed was 02/01/2017. In 2018, the indicator was frozen. Whether the upward trend will return is unknown. The next change is scheduled for 10/01/2019. Thanks to this change, pension benefits for former military personnel of the Russian Federation will be increased.
Reduction factor for military pensioners in 2021
The procedure for applying the payment of partial pensions to military pensioners has been applied since 01.01. 2012. During this period, only half of the pension was paid - the reduction factor was set at 0.54. This was stated in paragraph 2 of Art. 43 of Law No. 4468-1. It was planned that each year the figure would increase by 2% until it reached 100%.
- for length of service of at least 20 years - payments are assigned if the former military man served in the department for a certain time period;
- reach 45 years of age , have a total work experience of at least 25 years, of which at least 12.5 years are military service; in this case, the person must resign upon reaching the age limit for service, for health reasons or in connection with organizational and staffing measures
- disability - assigned if a serviceman became disabled during service or within 3 months after dismissal;
- loss of a breadwinner - assigned to the relatives of a deceased serviceman. Paid while family members are considered disabled.
The explanatory note to the bill states that against the backdrop of a “freezing” of the reduction coefficient, a gradual increase in military pensions is planned in 2021. This will happen due to the indexation of salaries by position and rank . The increase will be 3.7%, which corresponds to the inflation rate that was officially recorded last year 2021.
If the reduction factor had not been applied (absent at all or equal to 100%), the former colonel would have received a pension in the amount of 28,400 rubles, which is almost 7.5 thousand rubles more than the current one. This formula, together with the coefficient, will be applied for another whole year - until the end of 2021.
There are no plans for a reduction factor in the current year 2021. For the entire 2021, the calculation will use the indicator at around 0.7368 . In November, a bill extending the “freeze” of the coefficient passed its third reading. And in December it was already signed by the President. Taking this value into account, the Government has already formed a budget for 2021.
Will the reduction factor be cancelled?
There have been discussions about abolishing this indicator for a long time. However, it only came to a real legislative draft and reading in the State Duma only once. This happened in 2014. A member of the Communist Party of the Russian Federation, Tetetkin, introduced legislative draft number 631118-6 to the lower parliamentary house. The bill proposed to completely abolish the use of this indicator. Consideration of this legislative draft took place only in 2021. Most of the deputies voted against it in the 1st reading . The bill was approved by only 19 members of the State Duma.
The Russian government is short of funds, therefore, cancellation is not expected in the near future. In addition, the deputies planned to implement a “freeze” at the value of 0.7223 for the entire 2021 (until 01/01/2020). This is precisely what the legislative draft, submitted by deputies to parliament and approved by the State Duma in the 1st reading, was aimed at. Fortunately for military pensioners, Vladimir Putin has made his own adjustments.
The Communist Party of the Russian Federation tried to introduce a legislative draft to cancel the reduction coefficient, but in the winter of 2021 it was rejected. After this, the government did not touch upon this issue in any way, since it planned to assign pensions taking into account 100% monetary allowance only from 2035. Now the increase in the reduction coefficient cannot be called stable. Therefore, it will not be canceled for now.
The size of the reduction coefficient for military pensioners in 2021
When should we expect the reduction coefficient for military pensioners to be abolished? According to the adopted plan and the current indexation schedule, the coefficient will reach 100% by 2035. An increase in pensions for former military personnel in 2021 can be achieved through various other payments. The calculation and accrual here is made on the basis of the average pension (RRP = 5606.17 rubles), if it increases by a percentage established annually (from April 1), the size of the main military allowances will also increase by the corresponding percentage.
The reduction factor for military pensioners should change annually, with a gradual increase. Due to the budget deficit, it is possible that it may be “frozen”, then indexation of pensions can be carried out as usual: an increase in old-age social benefits by 2.6% of the RRP from April 2021 means an increase in the base part for former military personnel by the same percentage.
Currently, former military personnel and employees of internal affairs bodies and a number of other law enforcement agencies do not receive full pay. How the reduction coefficient for military pensioners will change in 2021 and whether we should expect a pension increase will be discussed in this article.
For the first time, the concept of “reducing military pension coefficient” was applied in February 2021. It is associated with the signing by the head of state of Federal Law No. 365, which suspended the forty-third article of the law on pensions for persons who served in the army and a number of other law enforcement agencies. A calculation coefficient was temporarily introduced, according to which the pension due to military personnel is divided by 100 and multiplied by its size. Initially it was 72.23% of the established monetary allowance.
The last time Russian military pay increased by two percent was in 2015. Subsequently, the implementation of the Presidential Decree was replaced by a two percent increase in the reduction coefficient. In 2019, an increase in the calculation base was recorded from 0.7223 to 0.7368.
The initiative to index military pensions by two percent above the inflation rate was enshrined in Decree of the Head of the Russian State No. 604, dated May 7, 2012. The main essence of this document is that the pension content of retirees should grow ahead of the established price index by two percent, regardless of inflation. Meanwhile, the initiative still remains on paper.
- salaries by rank and position, as well as monthly interest for length of service for current security forces will be increased from October 1, 2021;
- the pension content of retirees consists of these components, therefore, it will also increase;
- salaries and pensions, growing by 3.7 percent in “pure” terms, are absolutely not impressive, however, we are talking here about the same planned inflation that was included in the federal budget for 2022.
We are talking here about indicators that formally correspond to the calculated level of inflation, but in recent years, the increase in pensions for Russian military personnel has noticeably lagged behind the changes in payments to civilians. Independent experts estimate the “under-indexation” of provision for retirees at 20-25 percent.
