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The retirement age will not be raised, but the Russians will be made to work longer

April 17, 2012, 15:19 UTC+3
The pensions will be calculated proceeding form the length of employment and the sum of salary
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The Russian pension system will undergo some changes again. The Ministry of Health and Social Development initiated a reform this time. The ministry submitted a relevant bill in the government. The pensions will be calculated according to the renewed formula. The retirement age will not be increased formally in next ten years, but the pensions will be calculated proceeding form the length of employment and the sum of salary. Thus, a citizen will have to work longer to get a decent pension.

The first change should be related to the formation of the salary size, the Novye Izvestia daily reported. Minister of Health Tatiana Golikova is talking the government into the abandonment of the pension savings, and the pension contributions should be made at the current tariff rate of 22% in the pay-as-you-go pension scheme. Three levels of the pension system are planned to create. The pension system will include compulsory state, corporative and voluntary saving levels, whereas the individual part of pension should be dropped. When the individual part is cancelled the size of contributions cannot influence directly on the size of pension, which will be easier for the agency to link it with the length of employment and the salary size of a Russian citizen of retirement age.

The second measure of the pension reform will be related to the length of employment, which is needed for retirement, the newspaper noted. It is noteworthy that since 2002 the minimal length of service makes five years and does not influence on the pension size. The Ministry of Health and Social Development offered to change the situation cardinally, increasing the minimal length of service from five to 15 years for a Russian citizen to claim for an incomplete pension. But the most important thing is to set the minimal length of service for the full pension at the level of 40 years for women and 45 years for men.

Thus, depriving the Russian citizen of an opportunity to increase his pension through financial instruments, the Ministry of Health and Social Development will leave the only way for him that will be a higher retirement age. “The pensioner will make a choice between an incomplete pension during the employment and an opportunity to get the right for the full salary,” the health minister said in a letter to the government.

In general, various experts, including the authors of the Strategy-2020 development program, are discussing for a long time the need for a longer term of service, the Moskovsky Komsomolets noted. However, the experts do not have such a radical position. Anyway, no one makes the Russians work for at least 40 years, except for the Golikova-led ministry. According to various public opinion polls, up to 12 million people do not pay any taxes at all that should be taken into account. Only 40% of pollsters acknowledged that their employers pay fully for them to the state authorities. The shadow economy cannot be destroyed at once, the newspaper reported, noting that the taxes are offered to pay like in Norway and the pensions like in China.

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