The pension reform in Russia is one of the most criticized. Critics say that there have been attempts to change the pension system several times in the last two years. In comparison with the early 2000s, the vector of pension reform has almost changed its direction completely. However, Elena Bibikova, a member of the Federation Council Committee on Social Policy, told Vestnik Kavkaza that the changes in the Russian pension system, which came into force on January 1st, were timely and won’t violate citizens’ rights.
- The new pension reform came into force on January 1, 2015. What has caused the need to significantly increase the requirements for retirement and the introduction of this new formula?
- The changes which took place cannot be called a big reform, which replaces the previous system. At the beginning of the 2010's we had such a situation, which did not reflect the requirements of the pension system and this affected the budget of the RF. On January 1st two new federal laws were introduced. This is the law of insurance pensions in the Russian Federation and the Funded Pensions Act. In addition to old-age pensions, I would like to draw attention to public, so-called social pensions, which are assigned to certain categories of citizens and are not linked to the presence of seniority. These are, for example, people with disabilities, war veterans, widows of World War II.
Insurance pensions are divided into three types. The first is old-age pension, we hope that all will live to this pension be able to receive it. The second type of pension is a disability pension. Finally, the third type of pension is a survivor pension.
Only two conditions were required for a pension, which were the age of retirement, and this had not changed since the 1930s - 55 years for women and 60 for men; and the second condition, which was necessary before the beginning of this year- five years of work. Since January 2015 we require experience of 6 years, and by 2025, 15 years of work experience, that is, significantly raising the bar, but on the ordinary person this won’t have huge impact. Everyone can work for 15 years. But the third condition, it is the presence of so-called pension coefficients, pension points. By 2025 the number of these points must be at least 30.
- With these points there are always a lot of questions from our students, and from our readers. How difficult is it to deal with these scores? And are they relevant to the size of the wage?
- What is the retirement score? For the pension point we build fractions: the numerator and denominator. The numerator is employer contributions, which the employer lists to the pension system for our wages, i.e. it is specifically my insurance payment to the pension system. This is the numerator - the fact that we will share for something to get the score. What do we share? We will share the amount of insurance premiums, which is calculated on the maximum insurance of the contributing salary. That is, to date, the pension system, this is since 2002, there is an order that the employer imposes insurance premiums , which are not all our wages, but some definite limit. So we have a strap, a maximum value which is subject to insurance contributions to the pension system. Last year it was 624 thousand rubles, this year it is 711,000 rubles. That is my 16% that for me was listed by employer and divided by the maximum and multiplied by ten. This is the formula that exists today to determine the coefficient. And multiplied by 10 - is for 2025.
What is significant for my pension? Official, white wage and how long I work for and how long I will pay insurance.
- What is meant by wages? There is a very delicate moment. Does this refer only to salary? Or is it a salary and bonus that some of them come from?
- The entire amount, which is paid to a particular employee, except for some occasional lump sum payments, insurance contribution to the pension system.
All payments, all allowances for the complexity of the work experience for overtime. And these charges are taken into account in all places of employment. If a person is working at two places, then where he worked, regardless, all the income he receives from the workplace is subject to insurance contributions to the pension system.
- Many companies are working in this way, when the salary, roughly speaking, is quite small, but most people get salary in the form of a bonus.
- When it comes as a bonus, it's very good, it forms the pension system of the individual. But if the bulk is prepared envelopes, so-called, this part won’t be taken into account for the pension system. But, if a person pays himself, as a rule, it happens with entrepreneurs, insurance payments to the pension system with a minimum income, the minimum wage, in this case for one year, the person gets a little less than 1 retirement factor. This means that in order to get his right to a pension, he needs 30 years of experience, which will then be translated and converted into points. On the one hand, for those who pay a minimal salary, it's bad, but on the other hand, we all need to clearly understand that the payments are made from a common pot. That is to say, someone pays 711 thousand per annum, the employer pays for it, and someone with a minimal salary, so experience increases, I think that is absolutely the right decision.
- What do statistics say? Does some part of Russia's population pay contributions to the pension fund, and who does not?
- In last November, the first statistics were announced. We have today about 60-67 million of working population. And about 20 million people do not pay.
We do not understand who they are. Housekeepers? There can't be so many. It could be those who live in rural areas, the small villages. There's just no place to work and they live off what they collect - berries, mushrooms etc., and scraping a living. But there is a category of person who just does not want to pay. That is, he has his own business, but at the same time it is in the shadows, which allows him today not to pay insurance contributions.
- And are there some specific items to obtain points, for example, for mothers who go on maternity leave?
- We understand what the insurance period, i.e. the period in which contributions are paid into the pension system. I work - the employer pays for me. But in life it happens that people for some reason might not work for a period. For example, while doing military service, caring for the elderly over 80 years, for the disabled group 1, caring for children, while receiving unemployment benefits, these so-called uninsured periods are subject toward contributions and a pension, to determine eligibility for a pension. And that the periods for which points are earned and pension coefficients as well. I'll tell you that the minimum wage counts for 0.9 points, it is less than 1 point, if a mother takes care of her first child, in a year she will receive 1.8 points, i.e. twice as much is paid. Military service counts for 1.8 points. For a second child it is 3.6, for a third child for a year it is 5.4 points.
As for the experience, it is directly related to the size of the pension. The thing is that here these rules, laws, scoring - it all only starts from January 2015. And what about until January 2015? I would conditionally stress that I have three piggy banks. The third piggy bank is from January 2015. I earn my pension, it is one bag. The second piggy bank is up to January 2002, because of each of your piggy bag payment of pensions, its parameters which are taken into account, and from January 2002 to January 2014 - this is the third piggy bank. Our pension, any person, say, this year or next year, will consist of three purses. The first purse - that I have earned the norms of the law which was in force until January 2002, the second - from January 2002 to January 2015, the third - in 2015. What is the difference? The fact that in any territorial body of the Pension Fund will explain that to January 2002 was taken into account seniority, ie pension formula, pension calculation directly depended directly from the seniority. The more experience, the higher coefficients for calculating the pension. And the salary taken into account. Also asked me this question: is it possible to take any salary? Yes . When people are paying for a pension, they may submit any salary until January 2002 for five years, any five-year period in a row. Or five-year plan, or the last few years - 2000 and 2001 because we did have to choose the most profitable option to calculate individual pensions. Therefore, the more there will be a salary until 2002, the more experience, the higher the calculated value of the pension.
Since January 2002, the rules were changed, and it is no longer seniority that is taken into account, wages, and from January 2002 to 31 December 2014 there account of the full amount of insurance premiums, which are transferred to the account of each person. These accumulated premiums: the employer lists, and they lay down on my personal account and my form so-called conditional pension capital. This is the second component of the pension.
And the third is from January 2015. What is defined in points, pension factor. As it is defined, we have you reviewed.
- Now a lot of talk is about a possible increase in the retirement age. How do you feel about that?
- The law determined that every person can define the time of his retirement. Here is a woman turned 55 years old, and she thought, "I'm not going to retire, I will work without a pension. What am I in this case they have? And in this case, the calculation of pensions my pension will increase by nearly 50%." To date, the law is the principle of voluntary deferral of retirement for a raising factors when calculating pensions.
Development of the pension system, which is designed to 2030, does not include raising of the retirement age. Although the subject is very lively and on very active discussion today. My opinion, you cannot just take today and say, "That all countries increased pension age to 63 years, even our former republics, which were in the Soviet Union (Estonia, Latvia - 65, 63 years), all raised, let us do the same.» It seems to me that in order to make such statements, it is necessary to consider all sides of the problem. The first criterion - how many people live after retirement. If we see that in the West people live up to 80 years, and we have an average age of 70 years today.
On the other hand, we have intergenerational solidarity. It is formed only conditional capital money today on personal accounts except the storage component, do not linger. They reflected on my personal account and went to pay pensions to today's pensioners. If the age inflate, we offend the older generation, because after he is retired, and have no time to live. Therefore, before we talk about what should or should not raise, you need to define statistics, and economics, and demography, and health status of people, all these factors have to be investigated , and only after that the propositions must be made.
- Let's talk with you about the Funded Pensions. Project of 2002. Already it is said the next year this must be the part of the pension freeze. Is there a future for funded pensions?
- You know, they've actually frozen. Funded pension adopted in 2002. And for a long time Pension Fund worked, and the expert community worked to explain what is the funded pension. That is felt that this is a funded pension, felt that the person can take part in the decision to be or not to be funded in recent years. But today, frozen storage is a component. These 6%. Who is eligible? Who have the right of men and women born in 1967 and younger, and provided that to date they have voluntarily declared that they do not want to participate in a funded system. If they are in the category of "silent ones", all their payment goes to the insurance part of joint and several. For every working person employer charges 22% of salary should be left for the Pension Fund. And 6% go to the so-called fixed monthly pension. A sister on earrings. 6% goes specifically to the personal account of this man. And that money are from nowhere from the pension system are not issued without the knowledge of the man. In 2013, it was first decided to freeze the funded part. That is, the government says that such is the accumulative part of which has been selected, the funded part was 6%, we are sending in all of its insurance distribution. For what? Very clear why, because there was almost more than a hundred NPF, not all of them were equally stable, not all of them are credible, well, that is, were the ones that strong, large, working class, and the yield is high. And there were those who did not not-so shaky, and as a result could be lost. Therefore, the government says, let's guys, we'll go through corporatization, change the ownership to the fund participated in management.
If a person happens that the young guys, life is life, leave this life, it is the accumulative part, it shall be returned to the successors.
It is very difficult to predict what will happen, because the disputes are serious. The social unit in a fairly categorically stands for the abolition of pension savings. All financial and economic bloc, including the Central Bank, strongly opposed the abolition of the funded part.
- It is de facto funded part, the frozen one, but is it documented? That is, if, say, someone from our viewers and listeners will hear our gear and decide "and I will go and write a statement that is such a part of my pension automatically went to the accumulation fund," will he be able to do it now?
- By the end of this year, there is the right to choose: if he goes to the collecting system or not. Moreover, for those people who are only just learning, students only come to life, the law defines: for 5 years, they have the right to make a choice. The Ministry of Finance said that, according to the opinion that it should be private savings, that is, to give form of private property. This question is very difficult. On the one hand, yes, reliable, guaranteed, yes, indexing goes. On the other hand, this is a loss of the right to inheritance. That is, there are for and against, but I, again, I believe that this debate, which is soon to find its completion.
- Elena, thank you very much for coming to our studio and we just explained thoroughly, literally step by step, what a modern Russian pension is. We are in studio of Vestnik Kavkaza, so I can’t help asking about your attitude to Caucasus, have you ever been here? What is the favorite place of yours?
- Yes, of course. I lived and studied not far from Caucasus, that is why I love this place. Firstly, people there are very friendly, very friendly, very respectful. On the other hand, it is beautiful nature, it is impossible not to admire the same Elbrus, and Mineralnyie Vody and so on. Therefore, it is like the North Caucasus, I love to go there, and I wish you all-all-all as long as possible to live, enjoy life, be lucky, happy and understand your family and friends.
