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MOSCOW, December 7 (Itar-Tass) — The Russian government will elaborate a new retirement benefit calculation formula in the first months of 2013, Russian Prime Minister Dmitry Medvedev said in a television interview on Friday.
“We will prepare the retirement benefit calculation formula in the first months of the next year. As concerns the cumulative part, each citizen embrace by this system will take his or her own decision within the next year,” he said.
The prime minister stressed that the pension reform had not been postponed for a year. “We have postponed a decision on the pension’s cumulative part, but a whole range of decisions have already been taken and will be in force from January 1, 2013, including early withdrawal, certain retiree categories and some technical aspects.”
According to the prime minister, the decision on the pension’s cumulative part was taken several years ago when the macroeconomic situation was different. “As a result, we saved up more slowly than we had planned and it was under the inflation rate. That is why we have managed to save less than we targeted,” he said.
In late November, the both houses of the Russian parliament, the State Duma and the Federation Council, approved amendments to the pension laws that change the formula of cumulative part deductions. Under the law, from January 2014, people born in 1967 and in later years will be free to choose a variant of the formation of the pension cumulative part. Currently, six percent of the overall salary budget go to the cumulative part of retirement benefits. The money is automatically transferred to the Russian Pension Fund, or to non-state pension funds or private managing companies is a person opts for that.
Under the new law, people will be free to choose either to keep deductions to the cumulative part at six percent or to bring them down to two percent and to channel the remaining four percent to the solidarity part (e.g. disability, death, redundancy, etc.). Six-percent deductions to the cumulative part will stay in force for clients of non-state pension funds.
To change a category, people will have to file a relevant application to the Russian Pension Fund before the beginning of 2014. Later on, such applications will be accepted once in several years.
The reform will embrace the so-called self-employed (private entrepreneurs, farmers, lawyers, notaries, etc.) who will have to pay insurance contributions of 26 percent of the minimal wage. Some categories of the self-employed, such as persons on parental leave to take care of children under 18 months, conscripted servicemen, spouses of servicemen and diplomats who cannot find a job, will be exempt from paying of insurance contributions.
Apart from that, the law obliges employers to pay insurance contributions from the salary budget for labor migrant who are employed for more than six months within a year.
This variant of the retirement benefit calculation reform was supported by Russian President Vladimir Putin.