MOSCOW, August 29. /TASS/. Russian President Vladimir Putin said in his televised address on Wednesday the retirement age for women should be 60 rather than 63.
"The retirement age for women should not increase more than for men. That’s why I believe it is necessary to reduce the increase in the retirement age for women proposed by the law from 8 to 5 years," Putin said.
The president said the draft bill on the pension reform suggests increasing the retirement age for women by eight years and for men by five years. "That wouldn’t do, certainly. This is wrong," Putin said.
"The retirement age for women should not outpace that of men. That’s why I believe it is necessary to reduce the increase in the retirement age for women proposed by the legislation from 8 to 5 years," Putin said, noting, "Our country’s attitude towards women is unique and compassionate." "We understand that not only do they work, but usually, they are the backbone of the entire home, caring for the family, educating the children and taking care of the grandchildren."
Putin also noted that women who have 37 years of work experience and men who have 42 years of work experience should have the right to early retirement. The draft law suggests that women and men may retire early if they work for 40 and 45 years, respectively.
"Those who started working early should have an opportunity to retire not only because of their age, but taking into account their work experience," the president said.
In his televised address, Putin outlined a number of measures that, in his opinion, will soften the decisions on raising the retirement age as much as possible.
"The proposals that were discussed today will be formalized as amendments and brought into the State Duma as soon as possible," Putin said.
"I have very accurately, in detail and absolutely sincerely reported to you about the current state and proposals for the sustainable development of the pension system in our country," the president said, stressing that "we have to take a difficult but necessary decision."
"I am asking you for understanding," the head of state said in his address to the citizens.
Main aim of the reform
Ensuring stable pension growth is the main aim of the planned pension reform, according to Putin.
"On June 16, 2018, the Russian government submitted a pension reform bill to the State Duma," Putin said. "On July 19, the parliament passed the first reading of the bill. Its main aim is to ensure the pension system’s stability in years to come. It means that there is a need not only to maintain the current pension revenues of the retired people but also increase pensions in the future," the head of state added.
"The suggested changes to the pension system will make it possible not just to preserve the level of pensioners’ incomes, but, what is crucial, to ensure a growth rate higher than the inflation rate. The adjustment for inflation on retirement benefits will stand at about 7% in 2019 already, which is twice as much as the inflation predicted for the end of 2018. Overall, we will be able to increase the old age pension for retirees by an average of 1,000 rubles [$14.8] in the coming six years," Putin said.
This measure will help bring pensions for retirees to a level of 20,000 rubles ($296.8) per month by 2024. Right now, that amount comes to 14,144 rubles ($209.9).
"Going forward beyond 2024, the changes in the pension system will make it possible to lay solid groundwork for the stable annual growth of pension coverage above inflation," the president added.
Alternatives were found unviable
According to the president, alternative ways of developing the pension system without raising the retirement age were considered, but were found unviable.
"By my request the government has been working on this issue until recently. They thoroughly studied and calculated all possible alternative scenarios. It turned out that, in fact, they do not solve anything radically. At best they only patch holes, or even worse - they carry destructive consequences for the country's economy as a whole," the president said.
In particular, the introduction of a progressive scale of income tax was discussed, Putin said. According to the estimates of the Finance Ministry, the application of a higher tax rate, for example, 20% to high incomes, can give about 75-120 bln rubles ($1.1-1.7 bln) a year.
"These funds, at best, will last for six days, because the daily, I want to stress this, the daily need for paying pensions in Russia is 20 billion rubles ($293 mln)," the head of state said.
Another option, according to the president, is to sell part of the state property, for example, all the buildings of the Pension Fund, including its regional offices.
"Of course, they (the Pension fund - TASS) occupy too much space with all their apartments. People are annoyed, and I understand it. The price of these facilities is 120 billion rubles, but even if we sell all of them and use the money to pay pensions, we can pay them for about six days, which is also not an option," he added.
Penalties for age discrimination
Putin said that employers should be made liable for dismissing or refusing to employ pre-retirement age individuals without grounds.
"I consider it necessary to set administrative and even criminal liability for employers for dismissing pre-retirement age workers and also for refusing to employ citizens due to their age. The corresponding changes to the legislation have to be introduced along with the approval of the bill on raising the retirement age," the Russian leader said.
According to Putin, "it would be wrong and unfair to use only administrative measures in this regard." "That is why, I instruct the government to offer real incentives for business so that employers should be interested in employing and keeping in workplaces pre-retirement age citizens," the Russian president added.
As Putin said, "seniors normally have good professional experience and these are, as a rule, reliable and disciplined employees and they can bring big benefits for their enterprises and companies."
"At the same time, it is important that they, like younger employees, could undergo required re-retraining, if they wish so, to gain new skills and raise their qualification. In this regard, I instruct the government to approve a special advanced training program for pre-retirement age citizens. It should go into effect as soon as possible and should be financed from the federal budget," the Russian president suggested.
Russia’s economy feels confident
The Russian economy, despite the known difficulties, feels confident, the budget has the resources to replenish the Pension Fund, Putin said.
"Right now, despite the known difficulties, the Russian economy feels confident, the budget has the resources to replenish the Pension Fund. At least for the next 7-10 years we will be able to continue increasing pensions on time," Putin said.
According to him, the country "overcame serious difficulties in the economy and since 2016 once again reached stable economic growth."
"Of course, we still have a lot to do, including in healthcare, in other areas that determine the quality and life expectancy. However, the undeniable fact is that due to complex of measures taken by the state and, more importantly, to people’s more responsible attitude to their health, today rate of growth of life expectancy in Russia is one of the highest in the world. In the past 15 years, life expectancy has grown by almost 8 years (7.8 years)," Putin said.