Funded pension reform
Since 2009, Russians have been able to partially manage the funds of future insurance benefits. When submitting an application, part of the funds (6% of the salary) went to a savings account. But, motivating the decision by the budget deficit, the Pension Fund froze the program in 2014. Most Russians have small amounts in their savings accounts. In 2021, the authorities started talking about the possibility of resuming the mechanism.
Information appeared in the media about the discussion of pension reform by representatives of the Central Bank and NPFs. It was assumed that regulators would create a new system where the funds would belong to the citizen and not the state. He will be able to receive the money upon reaching retirement age or in the event of an emergency specified in the documents. The project also provided for full reimbursement of the deposit amount. Currently, persons entitled to compensation can receive up to 1.4 million rubles. Similar proposals have been made previously. But 1.5 years ago, the government (in particular, the Ministry of Labor) did not support the introduction of a guaranteed pension plan.
What did United Russia offer?
So, what does the party propose, and what conditions does it want to soften the pension reform? She made two proposals, which we will consider in detail.
Property of corrupt officials in favor of the Pension Fund
The party's first proposal is to transfer the confiscated property of corrupt officials to the benefit of the Pension Fund. However, the property already goes to the state treasury, so such an initiative will in no way solve the budget deficit of the Pension Fund. Accordingly, the problem with the shortage of funds is not being solved.
What pitfalls did the government include in the new pension reform?
In addition, insufficient amounts of money are confiscated from corrupt officials, and they cannot be compared with the figure that the Pension Fund requires monthly to pay pensions, social benefits, etc.
As the President of the Russian Federation said in his address, “the daily need for pension payments is 20 billion rubles.”
During the period from 2013 to 2021, only 1.2 billion Russian rubles worth of property and funds were confiscated from corrupt officials. This information was presented by the secretary of the General Council of United Russia. In 12 months, it turns out that about 200 million rubles will be confiscated from corrupt officials. And if you divide this amount by the number of days in a year, you get 548 thousand per day. And for how long will they last? Only if for 20 minutes.
Elimination of pension bonuses for “deputy service”
This is the second amendment presented by the United Russia party. As it turned out, in the context of the next review, no one is proposing to eliminate pension bonuses for “deputy work.” The party cannot propose such a “fascist” initiative in relation to deputies, the majority of whom are members of United Russia.
All the latest news and changes in pension reform as of July 25
The essence of the proposal is that the deputy voluntarily and independently refuses the pension supplement. If not, then no one will forcibly liquidate it. To receive the supplement, the deputy must write an application. If he does not write it, then bonuses are not awarded.
And objectively speaking, it is quite difficult to imagine a situation where deputies will race to refuse pension bonuses. Moreover, deputies have had this right for a long time, but there are no precedents for refusing bonuses. And it’s unlikely they will. At the same time, we must not forget that bonuses for an ordinary pensioner and pension bonuses for a deputy are completely different things. And voluntary refusal is nonsense.
It can be assumed that United Russia simply made its amendments without thinking about what they were and what benefits they would bring to Russians. For what? Yes, just to check in and be like everyone else. But why anger people who are already aggressive?
Of course, this is the most exciting question, and, unfortunately, we cannot provide an exact answer to it. We can only guess. It is possible that the party is too lazy to come up with something really worthwhile. Therefore they speak out automatically. Without thinking about what they are offering at all. Or maybe the party is happy with everything, and they don’t want to “use their brains” to come up with mitigating conditions.
Indexation proposals in 2021
Pensions in Russia are regularly recalculated. Thus, insurance payments in January 2021 were indexed by 6.3%. By 2024, the average pension should increase to 20,000 rubles. (now – about 17,000 rubles), stated the Pension Fund. But such an increase is not enough, A Just Russia is confident.
“Over 2 years, the rise in price of basic goods amounted to 20%. In May, the real size of the pension decreased by 0.5%,” its leader, Sergei Mironov, commented on the party’s position.
The deputy added that given the current real inflation (about 10%), an increase in the average pension to 20,000 rubles. seems unimportant. Even a 5% price increase will not help provide decent payments to pensioners. According to Mironov, the existing system must be completely changed. In particular, it is planned to liquidate the Pension Fund and increase the share of deductions from high incomes (from 1.5 million rubles). Mironov is confident that it will be possible to achieve the implementation of the pension reform if the majority of the government is made up of “leftist” parties.
The head of A Just Russia has repeatedly spoken out against the existing pension system. But usually the initiatives remained at the discussion stage.
What benefits will remain for women over 55 and men over 60?
“I consider it important to preserve for the transition period all federal benefits in force on December 31, 2021. I mean benefits on real estate and land taxes. They can be used by women over 55 years of age and men over 60 years of age. Thus, even before retirement, they will no longer pay taxes on their house, apartment, or garden plot.”
The topic of maintaining benefits was constantly raised during the discussion of pension reforms. People were afraid that as soon as the age was raised, they would lose social assistance. Of course, the ones that hit the wallet the most are taxes on an apartment, house, dacha, garage and land. The maintenance of property becomes more and more expensive every year - they began to calculate it at the cadastral value. But current retirees are exempt from these taxes.
“During the transition period, people of the new pre-retirement age - women from 55 years of age and men from 60 years of age - will also be exempt from taxes on an apartment, dacha, house, garage and 6 acres of land. Many people were waiting for this decision. And it will really become a serious support,” said the head of the Union of Pensioners, Chairman of the Federation Council Committee on Social Policy Valery Ryazansky . “It’s not difficult to secure these federal benefits. You just need to write down amendments to the Tax Code, which will be included with the pension bill. However, the president proposed maintaining not only federal, but also regional benefits at the current age. This includes free travel on public transport, discounted medications, cash payments, benefits for housing and gas services - different regions have different sets of benefits. I was recently in the Novosibirsk region, where 142 regional benefits operate. Some of them are provided to pensioners. Now they should be “tied” not to retirement age, but to pre-retirement age. It is clear that the decision on benefits will be made by local representative authorities. But I am confident that all legislative assemblies are capable of fulfilling the wishes of the president and the orders of voters. Moreover, additional funds are not required for this. The regions will simply have to maintain funding for benefits at the current level.”
How much will Vladimir Putin's pension initiatives cost? More details
Cancellation of raising the retirement age
The previous significant reform delayed retirement. The retirement age is gradually increasing to 60 and 65 years for women and men, respectively. To apply for social benefits, the deadline is further extended by 5 years.
In March 2021, members of the Communist Party of the Russian Federation were offered to return to the previous retirement age. The communist project, later supported by A Just Russia and other parliamentarians, featured:
- teachers;
- doctors;
- firefighters.
Putin partially approved this initiative. In May 2021, the president signed a law allowing retirement at 55 and 60 years old - relaxed conditions apply mainly to pre-retirees. They must lose and confirm the impossibility of re-employment. To do this, a person registers with the employment center. There are also requirements for the length of service of the future pensioner. Men and women must work for a minimum of 25 and 20 years.
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When will mothers with many children retire?
“We must provide for the right to early retirement for mothers with many children. If a woman has 3 children, she will be able to retire 3 years earlier. If there are 4 children - 4 years earlier. And for women who have 5 or more children, everything should remain as it is now - they will be able to retire at 50.”
“To be honest, we were very happy when we heard that mothers with many children would receive the right to early retirement,” Natalya Karpovich, and chairman of the Association of Large Families of Moscow . “Both our public organization and many others spoke about the need to preserve preferential pensions for those with many children. And it is very pleasant that our initiatives were heard and supported. The pension law is being prepared for future generations, and our country needs to improve its demography. And it’s good that now women will know: the more children they give birth to and raise, the sooner they will be able to retire.”
“Of course, this is a positive decision for mothers with many children,” says Elena Urban, president of the Kaliningrad regional public organization “Association of Large Families,” . “But all mothers who have given birth to 5 children or more must understand that they are left with the current retirement age of 50 according to today’s legislation. It says that a woman must have at least 15 years of insurance experience (Article 32 of Federal Law No. 400 “On Insurance Pensions”). This means that if she doesn’t officially work them off, she won’t be able to retire at 50.”
Increase in pensions
Of course, this is why the retirement age was raised in the first place.
Indeed, pensions will increase next year, but not quite as much as we would like. For the next six years (from 2021 to 2024), the rule on annual double indexation of insurance pensions (from February 1 and April 1) has been suspended.
Pensions will be temporarily adjusted once a year, from January 1. The highest indexation rate (7.05%) is planned for next year, 2021.
In the future, the coefficients will gradually decrease: in 2021, pensions will be indexed by 6.6%, in 2021 - by 6.3%, in 2022 - by 5.8%, in 2023 - by 5.5 %, and in 2024 - by 5.4%.
If we remember that next year VAT will increase, and along with it many goods and, most importantly, utilities will become more expensive, then the joy from the upcoming increase in pensions is somewhat darkened.
For Putin’s amendments, but against pension reform: how the vote went in the State Duma
In total, more than 300 amendments were considered at the State Duma meeting, including amendments introduced by the president. Initially, all the deputies present unanimously supported Vladimir Putin’s proposals aimed at softening the reform.
Everyone voted “for” the option of raising the retirement age proposed by the president. 385
deputies from all parties.
However, later some of these same deputies voted against the reform - 59
people's representatives. Among them are 41 parliamentarians from the Communist Party of the Russian Federation, 17 people from A Just Russia and one non-factional deputy. Deputies from the LDPR - except for one parliamentarian who voted “for” on all issues - appeared at the meeting, but did not vote at all.
Voted “for” raising the retirement age 326
deputies.
In United Russia, 324 people cast their votes for the reform, including deputies from the Krasnoyarsk Territory - Viktor Zubarev, Raisa Karmazina, Pyotr Pimashkov, Artur Chilingarov, Yuri Shvytkin and Larisa Shoigu.
Let us note that one United Russia member, Zaur Askenderov, abstained from voting. However, later the chairman of the United Russia faction, Sergei Neverov, told Dozhd that Askenderov pressed the “abstain” button by mistake.
There were also deputies in the Communist Party of the Russian Federation who did not know how to use buttons. Thus, Zhores Alferov voted both for Putin’s amendments and for the law itself. But later Valery Rashkin clarified on Twitter that in fact Alferov did not vote for the reform and his vote had already been withdrawn.
As it turned out, Alferov was not in the hall at all at the time of voting, but a bottle of water that he accidentally placed on the button voted for him, Kazankov explained.
Non-factional deputy Rifat Shaikhutdinov also voted for the law. ( Corrected:
Rifat Shaikhutdinov voted against in the first reading, but subsequently did not vote).
The position of the deputies, who do not support the law and rally against it, but at the same time unanimously vote for the president’s amendments, outraged social media users. Many called this act hypocrisy.
"How shoud I understand this? The Communist Party of the Russian Federation, the Liberal Democratic Party and A JUST RUSSIA are against pension reform or for it as worded by Putin? A cowardly, confused opposition, ready only to promote itself on the topic of social justice, but not ready to fundamentally say “no” to the plans of the president and the government to take away pension payments,” Andrei Seleznev, a former deputy of the Krasnoyarsk City Council from the Communist Party of the Russian Federation, noted on Facebook.
At the same time, the deputies from the Communist Party of the Russian Federation themselves commented on the current situation:
“The Communist Party of the Russian Federation supported only the presidential amendments (which lower the retirement age for men from 68 in the first reading to 65 in the second), because 65 is still better than 68. In general, the faction is still against the reform and will vote against it,” said Valery Rashkin.
“They are improving the law that United Russia introduced.” That's why we voted for amendments to the bill. At least they replaced the fact that women’s retirement age is increased by 5 years, and not by 8, as was originally the case. We can't vote against this.
In principle, I would not vote for this law at all. I would not make any amendments to it. The fact is that the law still raises the retirement age. For 5 or 8 years, what's the difference. We are against raising the retirement age and should have completely refused to vote and participate in the discussion,” Arefyev was quoted as saying by Dailystorm.
Let us add that federal television channels presented the State Duma’s decision on the retirement age to the viewer as an important historical event that will improve the lives of Russians. Let us note that the deputy corps applauded itself after the adoption of the law. Federal media called communist protest T-shirts a “light flash mob.”
Let us note that state media broadcast Volodin’s remark about the cost of a deputy’s jacket, but cut off the phrase “our salary is much higher than that of those who elected us.”
According to federal media theses, the welfare of pensioners will soon improve, because after the pension reform their pension will increase to 20 thousand rubles.
“There is something to strive for, and today’s vote is the first step in this direction,” concluded the Channel One correspondent.
Meanwhile, the federal media did not cover the spontaneous rally taking place that day near the parliament building.
We would like to add that the third reading of the law on raising the retirement age is scheduled for September 27. However, the main meeting has already taken place, so many call the final discussion just a formality.
