Will Russia raise retirement age?

Will Russia raise retirement age?

Russia's government is discussing the issue of raising retirement age, but it is too early to talk about concrete decisions, the Russian Minister of Labor and Social Protection Maxim Topilin said.

"The discussion is underway, no specific decisions have been taken yet," he said, adding that increasing retirement age is "the most contentious moment" in terms of balancing the pension system.

The Minister noted that this only at first glance it seems that raising retirement age will automatically increase revenues and cut costs. "Calculations show that, maybe there will be some benefit for the pension fund's budget in the first few years, but in 3-4 years people will earn more rights [ in terms of the pension's amount], and it will be necessary to pay more in the future," TASS cited Topilin as saying.

Earlier, Russian President Vladimir Putin said at the annual press conference that there is no final decision on the issue of raising retirement age yet, it can only be taken during open discussions and should not shock the population.

The head of Research Center for pension systems and actuarial prediction of the social sphere of the Institute for Social Analysis and Forecasting at the Russian Presidential Academy of National Economics and Public Administration, Elena Grishina, speaking with a correspondent of Vestnik Kavkaza, noted that the main disadvantage from raising the retirement age is the excessive growth of pension rights of citizens. "If all the savings from raising retirement age are aimed at increasing pensions, then the indexation of pensions will increase dramatically, which will impose big obligations on the government," she said.

There are other concerns. "Not all of those who will be forced to continue working will be able to find work. Although many experts say that jobs for the elderly and young are not direct competitors. In principle, the share of young people in the labor market is declining because of the demographic crisis of 1990. In this regard, we could say that the influx of new labor is a positive moment, but nevertheless, they still have to make some effort to upgrade skills of older people," Elena Grishina warned.

"There are many state benefits for employers, reduced tariffs, which are given to employers as a preference. Employees who work at such enterprises have lower contributions to pension funds, while they will receive a pension in the given amount, not lower than the cost of living. In such cases there should be compensation for workers, for which purpose the state allocates additional funds. There is also the problem of early retirement, these are teachers, doctors, employees of hazardous industries," the expert recalled.

"And this requires special attention, because hazardous work must be taken into account when drawing up standards for early retirement," Elena Grishina concluded.