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Premier acknowledges pension system errors

According to the prime minister, "they've erred in a number of stimuli; as a result, the difference will be in favor of the distributive system"

GORKI, December 4 (Itar-Tass) — Prime Minister Dmitry Medvedev acknowledged "calculation errors" during the shaping of the Russian pension system several years ago. He was speaking at a meeting with members of the all-Russian association "Russian Union of Industrialists and Entrepreneurs" on Tuesday.

"If we speak about the system; there was an error in calculations; simply it has to be admitted," Medvedev noted.

When the system was being approved, they assumed that by 2023 the persons of retirement age will receive the funded component which will be larger than the pension of the distributive part.

According to the prime minister, "they've erred in a number of stimuli; as a result, the difference will be in favor of the distributive system. What kind of a funded system is that?" Medvedev said.

Prime Minister does not think it is necessary to cancel the funded part of pension.

"Our wish is not in cancelling the funded system; it's a quite rational part of the pensions system in the country; we wish to optimize it," Medvedev stated at a meeting with members of the Russian Union of Industrialists and Entrepreneurs /RSPP/.

He added that the system should be optimized by the most effective and breakeven methods for business. He suggested that people take a year's pause to decide which system which they wish to keep.

"I believe it's a rational way on the whole," the prime minister underlined. He stressed that "we’re open for the discussion of this problem in general; especially because we have a year with respect to the funded element of pension."

At the Tuesday meeting, RSPP president Alexander Shokhin complained to the prime minister that "the proposals the government submitted to the State Duma differ from our ideas about how to handle the funded element of the pension system and the prospects for tax burden on the business."

Medvedev objected saying "we assume that the proposals that have been brought forward will not worsen the situation either for business or for the citizens."

“You understand that the system which has formed does not work for "long money". The Finance Ministry has not given a single rouble from this money box, to put it frankly, and not because the Finance Ministry is bad, but because this system had not created the resources, which would be necessary for infrastructure projects, for example.”

He also acknowledged "calculation errors" during the shaping of the Russian pension system several years ago. "If we speak about the system; there was an error in calculations; simply it has to be admitted," When the system was being approved, they assumed that by 2023 the persons of retirement age will receive the funded component which will be larger than the pension of the distributive part.

"They've erred in a number of stimuli; as a result, the difference will be in favor of the distributive system," Medvedev said.

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