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Putin says no need to raise retirement age in Russia

December 06, 2013, 7:21 UTC+3 MOSCOW
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MOSCOW, December 06, 6:00 /ITAR-TASS/. President Vladimir Putin said there was no need to raise the retirement age in Russia.

“It would be unadvisable to raise the retirement age in Russia now as all European countries and our neighbours have done,” Putin said at a conference of the All-Russia People’s Front on Thursday, December 5.

“We need to ensure the stability of the pension system, make it an effective part of the Russian economy, ensure its social fairness and guarantee that pensioners’ income is comparable with the average salary of the past several years,” he said.

“We should try to reach the level of developed world economies. Can this be done? It can,” Putin said.

Raising the retirement age in Russia would be unacceptable and unnecessary, he said earlier.

“This is ruled out. If we did this, the retirement age in the country would be 65 years already now for both men and women. We understand that this is unacceptable and unnecessary for Russia now,” Putin said.

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.

In his view, good economic stimuli should be created for that but warned that they “must not be imposed but should be stated and offered.”

Putin said that the overall size of pensions will also grow. “We will not allow pensioners to fall into poverty again as before, all of them without exception,” he said.

He promised that all socially vulnerable sections of the population that need help from the government would get all the necessary conditions for decent life and self-realisation.

He was echoed by Valery Ryazansky, chairman of the Federation Council Committee on Social Policy, who said that there would be no need to raise the retirement age in Russia until 2050.

“We have set such a regime for ourselves and experts who are working on the [pension] formula that the question of retirement age is not on the agenda,” he said.

“All calculations have been made in such a way that we will not consider this issue in principle until 2030 or even 2050,” Ryazansky said.

Yuri Gorlin, Deputy Director of the Institute of Social Analysis and Forecasting, said a new pension formula will raise the pension considerably and its size will grow further if a person retires late.

The new 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,” Gorlin said.

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

The Russian authorities have repeatedly stated that the pension reform would not lead to the raising of the retirement age.

Deputy Prime Minister Olga Golodets said the retirement age in Russia would not be raised but people will be encouraged to work longer.

“The retirement age will not change, but economic mechanisms will be created to encourage a person to keep working,” Golodets said.

According to the deputy prime minister, “13 million people keep working, women aged 55-57 feel young” and work to make money, but keep them incentivised is an economic issue.

“We are working on mechanisms that will encourage people to get a bigger pension [by working longer] with no pension to be paid while they work. But this is a matter of distant future,” Golodets said.

Currently men in Russia retire at 60 and women at 55.

Minister of Labour and Social Security Maxim Topilin said that the idea of raising the retirement age in the country would lead nowhere and would fail to balance the Pension Fund's budget.

“The demographic situation is such that there is no prospect or need to raise the retirement age,” he said.

“There is a popular belief that if the retirement age is raised, the Pension Fund deficit will decrease. But it will not,” the minister said.

“If you raise the retirement age, you will pay [pensions] for a shorter period of time, but the amount of obligations under the pension formula will not become smaller,” he said.

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