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Published in Stream:
Russia Update: May 24, 2016
Press by
The Interpreter
@Interpreter_Mag
Russian-to-English translation journal, with original analysis and commentary on Russia's foreign & domestic policy.
Interpreter_Mag
Putin Raises Pension Age to 65 for Government Workers; No Indexation for Inflation
6 years
Thugs Ransack Apartment of Russian Political Prisoner Dadin's Wife
President Vladimir Putin has signed a law raising the pension age for officials from 60 to 65 for men and from 55 to 63 for women, effective January 1, 2017, Novaya Gazeta reported, citing the governmental portal. The law was passed by parliament on May 11.

Those affected include government civil servants, municipal workers and others who hold government posts in regions and municipalities. 

The law also provides for gradually increasing from 15 to 20 years the minimal tenure required to receive a pension.

Raising the pension age is one of the measures the Russian government is taking to deal with the economic crisis which has seen the value of the ruble drop by a third. The ruble's devaluation has come with the fall in the price of oil, and the economy has suffered other losses from Putin's over-extension of the state budget to fulfill 2011 campaign promises as well as from Western sanctions over the war in Ukraine and Russia's counter-boycott of food imports.

While the government also anticipates laying off workers, the Ministry of Economic Development, in a report this week, said that raising the pension age would help address labor shortages especially in the Far East.

The report says that demographic contractions and the drop in the number of those in the active work force means that the number of employed workers will go from 68.6 million in 2015 to 67.5 million in 2019.

Kommersant reported that payment of pensions for government workers does not come out of the Pension Fund but the state budget. That does not mean that there will necessarily be a raise of pensions for all workers, although that measure is being discussed and is recommended by economist Aleksey Kudrin, recently brought back as a government adviser. Kommersant believes the raise of the bureaucrats' pension age will prompt a broader discussion about raising the age for everyone.

According to RIA Novosti, however, which obtained materials related to the Ministry's report this week, Economic Minister Aleksei Ulyukayev plans to propose raising the pension age for all Russians at a meeting of the Presidential Economic Council tomorrow, May 25. A document says that raising the pension age would be done "not only to balance the pension system" but to "prolong the period of productive life of future pensioners" and also "lower the deficit of labor resources on the market."

This document also noted that Russia would lose 200,000 to 300,000 active workers per year unless they raised the pension age. The Ministry also admitted that it would be "impossible" for Russia to return to its one-time growth of 5-7% a year, even if oil returns to $50/barrel. (It's now at about $48).

Olga Golodets, the vice premier for social and labor issues, had earlier said that media reports of a "deficit" in the pension fund were a "myth" and also denied that the government would be raising the pension age.

Finance Minister Anton Siluanov has advised Russians to save for their own pensions.

Meanwhile, Prime Minister Dmitry Medvedev, on a trip to Russian-occupied Crimea, told Crimean residents who complained about their small pensions that they would not be seeing indexes to inflation, Interfax reported.

Russian propaganda posters during the rigged referendum in Crimea regarding annexation promised people that they would see their Ukrainian pensions tripled. While they were raised, this quickly devalued with the drop of the ruble.

"We don't have indexation anywhere, we haven't passed that all all, we just don't have the money," Medvedev said.

"If we find the money, we'll do the indexation," he promised.

He further explained, "We will do pensions throughout the country, we can't do [the indexation of] pensions just in one place."

Putin had pledged in April that the government would return to the issue of indexation of pensions in the fourth quarter of 2016. Labor Minister Maksim Topilin said the Pension Fund budget would allow for "the issue of indexation of pensions in full to be resolved." But now he has said "a decision was not made" although he remains "positive."

The Russian press has run a lot of cartoons on the topic of pensions. In this one, the supervisor is saying "What do you mean, you're dead? You have five years to go until your pension!"
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2016-05-24 15:18:48
This image by proforex.ru shows the average age of pensions in various countries: 81 in France, 79 in Germany, 78 in the US and shows Russia as the youngest at age 66. It also shows the amounts of the pensions -- in France, 42,730 euros a year, but in Russia, the equivalent of 8,250 euros a year.
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2016-05-24 15:23:51

In Russia, 68% of males live to reach pension age and 86% of females, says proforex.ru.

The inadequate size of the Russian pension also makes for a lot of cartoons, like this one, where an old man's cat is leaving him, saying "We can't live together on one pension."


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2016-05-24 15:20:10

-- Catherine A. Fitzpatrick