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Anton Siluanov: new pension formula to encourage Russians to retire later

July 04, 2013, 22:45 UTC+3
The average pension in Russia now is 10,400 roubles
1 pages in this article

MOSCOW, July 4 (Itar-Tass) - A new pension formula to become effective in Russia from 2015 will stimulate people to retire later, Finance Minister Anton Siluanov said.

“The formula will seek to stimulate late retirement without raising the retirement age,” Siluanov told Russia 24 television on Thursday, July 4.

“If a person has reached the retirement age but keeps working, he will have additional benefits,” the minister said, adding that “extra benefits will be granted to those who has a long service record of more than 35 years.”

Pension rights will be calculated using points. “If we know the number of points and their current value, we can calculate a pension in each specific year. The value of a point is determined using a sum total of coefficients. A pension calculator will become available on the Labour Ministry’s website next week so that everyone could calculate his pension,” Russian Pension Fund Head Anton Drozdov told ITAR-TASS earlier.

He stressed that the length of one’s service and salary are key indicators that influence a person’s pension rights. “The longer one works and the more he pays [to the Pension Fund], the more pension rights he will have. There will also be incentives to encourage people to retire later and more stringent requirements will apply to the minimum payment and minimum length of service for acquiring pension rights,” Drozdov said.

With the standard length of service set at 35 years and average salary a person will get a pension of no less than 40 percent of his salary. “Men will be awarded additional points for working more than 35 years and women for working more than 30 years. These additional points will be awarded to those who do not retire upon reaching the retirement age but continue to work for another five or ten years,” Drozdov said.

“A pension formula should allow for a differentiated approach to each citizen: the more years of service and the higher the salary, the higher the pension. And of course the formula must be fair, stable, transparent and, crucially, clearly understood by both employees and employers,” President Vladimir Putin said.

“The formula must be plain and clear so that every person could use it for calculation. The task is to get a formula that could be explained to anyone. This is a serious task and we have to solve it,” Deputy Prime Minister Olga Golodets said earlier.

“We agreed that no matter what the formula is, the Labour Ministry will work out a calculator and make it public as well as the draft formula,” Golodets said.

A new pension formula will increase the pension considerably depending on the seniority record and incentivise people to work longer after the retirement age. “Calculations show that if [a man] retires not at the age of 60 but at the age of 65, his pension will grow to 85 percent,” Yuri Gorlin, Deputy Director of the Institute of Social Analysis and Forecasting, said.

He said a new pension formula will raise the pension considerably and its size will grow further if a person retires late.

The president said pensioners who wish to work after retirement should be allowed to do so.

“I want to stress once again that we have no plans to raise the retirement age. But those who wish to continue working after reaching the retirement agent and want to preserve a good income -- we must create additional conditions for them to earn a better pension,” Putin said.

The average pension in Russia now is 10,400 roubles.

 

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