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Retirement age rise speculations in focus again

April 15, 2015, 19:08 UTC+3 Alexandrova Lyudmila
© ITAR-TASS/Zurab Javakhadze

MOSCOW, April 15. /TASS/. The possibility of raising the age at which senior citizens are entitled to retirement pension is in the focus of public debate again after Finance Minister Anton Siluanov said such a measure was an urgent need given the current complicated situation in the economy. This proposal has many supporters and as many opponents, including those in the government, although, as Deputy Prime Minister Olga Golodets has told TASS, the Cabinet’s position on the issue remains unchanged for the time being. There is no unanimity on the issue among the Russian experts, either.

Russia’s official retirement age is 60 for men and 55 for women. The pensions are paid from the Russian Pension Fund, which gets funding from two main sources: insurance deductions and budget transfers (when the insurance deductions are not enough). Last year’s transfer to the Pension Fund totaled 2.8 trillion rubles (an equivalent of $56 billion).

The Finance Ministry is pressing for the gradual leveling of the age at which men and women retire on pension and setting it 63 years. Economic Development Minister Alexey Ulyukayev has suggested doing that gradually, by six months each year during a period of 10-15 years. The Labor Ministry is against. It argues that the retirement age rise will not reduce the Pension Fund’s deficit or help save budget money.

According to opinion polls, 80% of Russians are against raising the retirement age.

"There are no sources available to replenish the budget," senior lecturer at the economics and finance chair of the presidential academy RANEPA, Lyudmila Pronina, told TASS. "The alternatives are few: a rise in the taxes either on legal entities, which excludes the role of the GDP, or on individuals, which is fraught with social problems."

One of the benefits of the reform is employees will be able to keep working and it would be impossible to force them to retire at the age of 55 or 60.

On the other hand, elderly people will have no time left for rest and leisure. Grandpas and grandmas will be unable to spend much time with their grandchildren, and so on.

"The interests of the authorities and of different groups of the population are different, of course.

"The problem is overripe," the deputy director of the Social Analysis and Forecasting Institute at the RANEPA Academy, Vladimir Nazarov, told TASS. "But this is a slow-going process. Avoiding it will be impossible, because the population keeps aging, and each year one million leave the labour market." He believes that the retirement age must begin to be raised right away. This will entail no major risks, because the rise will be gradual. As the experience of other countries indicates, the people find the time to adjust themselves.

"Retirement age rises should not be perceived as a means to mend holes in the budget. The measure will be geared to ensure a normal ratio of the pension and the wage. In the short term this will not dramatically improve the budget situation," Nazarov said.

At present there are no obvious arguments for such reforms, says the deputy rector of the RANEPA academy, Alexander Safonov. "Life expectancy in Russia is lower than in the European countries, where this strategy has been implemented," he told TASS. "If the pension age goes up, many will be quitting jobs for natural reasons."

Besides, the problem of employment should not be discarded altogether, either. This is the chief restriction on making such a decision.

"Amid the crisis the problem of employment has aggravated. As soon as the pension age goes up, young people will find it far harder to get a job. Already now young people account for the main contingent of the jobless. That means that budget spending on supporting the jobless will be growing."

Moreover, according to the statistics service Rosstat, about 40% of the employed develop occupational diseases and the retirees will have to be given certain social benefits.

"The funds will be taken not from the pension system, but from the system of social insurance, in other words, from the budget. No budget money will be saved," he warned.

Safonov agrees that the problem of raising the retirement age must be discussed, but certainly this is not the task for this year or even next year.


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