Is Russia worst country to be elderly?

Is Russia worst country to be elderly?

Russia is No. 40 among 43 countries in the 2017 Global Retirement Index, published today by Natixis Global Asset Management, just above India, Greece and Brazil.

According to data compiled by Natixis, several factors affected the overall score for Russia (45%) in this year’s index (46% in 2016): decline in prosperity, robust finances and strong grades in health.

The top 10 countries in the 2017 index include eight from Western Europe, including Norway at No. 1, followed by Switzerland, Iceland, Sweden, Germany (No. 7), Denmark (No. 8), the Netherlands (No. 9), and Luxembourg (No. 10). New Zealand (No. 5) and Australia (No. 6) complete the top 10. 

The vice-rector at RANEPA Alexander Safonov, speaking to a correspondent of Vestnik Kavkaza, noted that such a low Russia's position in the retirement rating is explained, among other things, by the specifics of the chosen indicators. "Part of them have directly nothing to do to the comfort of living of pensioners in the country, in particular, the development of finance in the country. In addition, there are indicators in Russia that exceed the analogies of countries ranked in the top positions of the rating, but which were not included in the study. First of all, the age of retirement: if in the US it's 67, but it's 60 in Russia," he pointed out.

The rating also does not take into account state assistance to pensioners. "The state is trying to help certain categories of citizens more actively through the social protection system.There are privileged travel for pensioners. There are programs to help veterans of labor. If you count on the total costs that the state bears, including the scheme of social protection, then the lives of pensoiners in Russia is more comfortable than the rating states," the expert said.

Nevertheless, the re-calculation of indicators does not lead Russia to the leaders in securing retirees. "The main problem is the replacement rate of lost earnings. The International Labour Organization (ILO) standards require the minimum replacement rate to be at least 40% of previous earnings. We often do not realize this standard, especially since, according to the ILO, this pension of 40% of the salary should provide enough money for two members of the family - a pensioner and his idle wife - to live. We are far behind other countries in this issue," Alexander Safonov stressed.

There are other problems in the pension sphere as well. "Life expectancy, low wages and quite high inflation drag us down in these ratings," the vice-rector at the Russian Presidential Academy of National Economy and Public Administration said.

At the same time, there are no immediate measures to solve these problems. "First of all, it is necessary to index pensions. But now only systemic work aimed at increasing the efficiency of the labor market may help," Alexander Safonov said.

"The main efforts of the government should be directed to the development of the economy now," he concluded.