Minister of Labour and Social Protection Maxim Topilin has unveiled the new pension formula and a new pension calculator.
Beginning January 1, 2015, a new procedure is planned to be introduced in Russia to calculate and determine the size of retirement pensions. The new rules have been drafted by the Ministry of Labour and Social Protection together with other concerned ministries, the Pension Fund and experts in accordance with the Strategy for the Long-Term Development of the Pension System, which was approved by Government Directive No. 2524-r of December 25, 2012.
Presenting the new pension formula, Maxim Topilin said that one of the priority requirements will be length of employment: the longer a person has been employed, the large the pension.
The Minister also said that the decision was taken to introduce mark-up factors for pensioners whose length of employment at the time of retirement is 30 years or more for women and 35 years or more for men. “In addition, the new formula includes the principle of additional pension increases for those who voluntarily agree – voluntarily is the key word here – to postpone their retirement,” he added.
Mr Topilin also said that the formula was developed based on international experience, including the system of mark-ups used to calculate pension entitlements in France and Germany.
It is important that the new formula does not provide for increasing the retirement age or the insurance burden on employers.
Its authors believe that the new system will help to increase middle-class pensions. The average pension should equal at least 2.5 of the subsistence income level for pensioners by 2030.
According to the new formula, pensions will grow due to regular adjustment for inflation, with a guaranteed pension amounting to at least the approved subsistence wage.
“All existing pensions rights will be fully preserved in the new formula,” Mr Topilin said.
The Minister also said that the pension calculator is based on the new pension formula and can be used to work out the amount of income you may receive in retirement in accordance with the current and new pension formulas and to compare the results.
The ability to calculate their pensions will help people better plan their lives and careers, determine the optimal length of employment and see how mandatory military service or childcare leave will affect the size of their pensions. The calculator clearly shows how pensions increase if the length of employment exceeds 30 years for women and 35 years for men, and if you choose to continue working after reaching retirement age. You can adjust the calculator’s variables (excluding the date of birth and gender) to see how the size of your pension will change under the current and the new formulas.
The pension calculator has been posted on the websites of the Ministry of Labour and Social Protection (www.rosmintrud.ru) and the Pension Fund (www.pfrf.ru).
Source: Ministry of Labour and Social Protection
