- The media has presented different interpretations of what the President had in mind following a meeting that he chaired on the future of the pension reform. For instance, there was a question about the funded component of the pension. He said that those willing to keep funded pension plans would be able to do so. But how much will the funded pension component account for: 6% or some other amount?
Olga Golodets: The main result of the meeting chaired by the President is that the Government-backed Pension System Development Strategy has been supported, including measures to update the funded pension component. Our Strategy expressly states that the funded pension system should be voluntary and lucrative for its beneficiaries. People will be free to choose a system that they like. We should not force people into playing a game without alternatives, especially when it involves risky and possibly money-losing investments the way it was during previous reforms.
- Some experts suggest raising the pensions of unemployed retirees. What do you think about this?
Olga Golodets: Current pension regulations are the same for those who work and for those who don’t. It is impossible to raise pensions for just one category of beneficiaries.
We are discussing incentives that would convince people to retire at an older age. Right now, 85% of retirees continue to work after reaching the retirement age. This initiative proposes that the retirement age be raised. At the same time, retirees would receive more substantial pensions. All pensions that are accumulated during this period will be used to increase pension entitlements at the age of 65 and beyond. This would amount to a substantial raise. We are now trying to estimate what the retirement benefit of a person who retires at an older age would be in order to get people interested in this scenario. But people should choose themselves. This model operates fairly well worldwide, for example, in Sweden.
- What do you think about the proposal to stop paying pensions to working retirees?
Olga Golodets: Retirees have earned their pension entitlements, so we are faced with a dilemma here. At some point during the discussion of the pension reform, someone suggested establishing a cut-off point for a specified category of retirees. For instance, some working retirees earn over 100,000 roubles a month. But there are few of them. However, we should first discuss this idea publicly. If it finds support with the experts and the public, then the Government will be able to start drafting proper decisions. So far, neither the Ministry of Labour and Social Security, nor the Pension Fund has compiled any specific estimates in this area.
- You said that people who make large contributions to the Pension Fund should receive larger pensions. However, doctors, teachers and nurses who have low salaries are doomed to receive very small pensions. Will this issue be addressed in any way?
Olga Golodets: The Government faces the challenge of bringing salaries in the public sector to a level that is at least on par with the average salary in a particular region. In Moscow, for example, the average salary for doctors is already upwards of 60,000 roubles per month, meaning that it is significantly above the average for Moscow. Teachers’ salaries in Moscow are over 50,000 roubles per month. However, we need to improve these numbers in other Russian regions as well. We are committed to raising salaries of secondary school teachers to match regional averages across Russia by 1 January 2013. Then we will raise salaries of other categories of public sector employees. Salaries will grow most markedly in 2018. The salaries of doctors and university faculty will double as compared with average regional salaries.
- Will years spent raising children be taken into account for retirement purposes? Under the current law, the Pension Fund compensates mothers only for three years of maternity leave, regardless of the number of children. Women are faced with a choice between children and their pension. Will these arrangements remain unchanged?
Olga Golodets: Compensation should cover the entire period of maternity leave, whether this is the first child or the seventh. I issued a directive, and the Government’s social agencies will soon draft a corresponding amendment.
- Corporate pensions are a very attractive idea used in many countries. However, it remains unclear whether employers will be required to create corporate pension plans.
Olga Golodets: These systems are voluntary throughout the world, but are very popular with employees. We need a regulated corporate pension market, such as in most developed countries. It should cover not 7 million people as now, but at least 25 million. It should be a clear, simple, affordable and efficient market. Our goal is to encourage its development and provide financial incentives. In particular, I have issued a directive to draft a law on repealing income tax on corporate pensions. Such measures will encourage employers to establish corporate pension plans and increase employee loyalty in the process.
- The Ministry of Labour found that in order to receive a pension amounting to 40 % of average earnings, an employee needs to work 40 years and contribute 20% of the salary to the pension fund. If you reduce the qualifying period for receiving retirement benefits to 35 years, will that mean that you will have to raise the rate, since the replacement rate will be less than 40%?
Olga Golodets: There’s no such thing as miracles. What we earn is what we get. The pension system has vast potential, because huge numbers of Russian employees do not contribute to the pension system. Of the 87 million working-age individuals, 48 million contribute to it, while the rest do not. If everyone was an honest taxpayer, the average pension would amount to about 20,000 roubles, not 9,700. Retirement funding wouldn’t be an issue. We will use this potential in promoting the pension system.
- Still, should the qualifying length of service be 35 or 40 years? Has this been decided?
Olga Golodets: Yes, it has. The strategy has the approved length of service set at 35 years.
Here’s a question that I can’t help asking: the retirement age in Russia is one of the world’s lowest. Are we going to bring it up to the level in France, Germany, or Italy?
Olga Golodets: The retirement age in our country is low, indeed. In addition, there 10 million early retirement benefit recipients in Russia. However, Russia lags behind European countries in terms of life expectancy, which is very important for the proper functioning of the pension system. So far, raising the retirement age has not been an issue.
- According to experts, the situation on the Russian labour market is not very favourable: official unemployment figures are low, but off-the-books employment is fairly high. How do we bring people out of the shadows?
Olga Golodets: We need to encourage small- and medium-sized businesses and at the same time improve tax administration. This is the only way to motivate entrepreneurs to come out from the shadows. As for unemployment, supply on the labour market is huge. The number of job openings has grown to 1.5 million from 1.1 million last year. So, the biggest problem for Russia is not unemployment but the lack of skilled employees.
For example, many young people study to become economists or lawyers, but after graduation they have hard time finding jobs. As a result, graduates get frustrated: they believe that they have received a good education, but cannot find a decent job to match their qualifications. There is a structural imbalance between the economy and the education system.
- But there are remote territories and small towns where there are no jobs…
Olga Golodets: We do have a problem with economically depressed regions. The state supports enterprises that are the backbone of the economy in some single industry towns, where life grows up around them. Funds are provided to support agriculture and this helps villages to survive. The state works to attract investors to economically depressed regions in order to create jobs and promote economic development.
- What should we do with the Labour Code? Should we rewrite it according to the proposal of the Russian Union of Industrialists and Entrepreneurs, or should we amend it?
Olga Golodets: There are options. The current Labour Code includes some things that stand in the way of organising modern work arrangements. For example, it does not include the concept of telecommuting, which is a widespread practice. The draft law on telecommuting was adopted in the first reading by the State Duma, the second reading is expected. According to the draft law, telecommuting comes with the same rights as normal employment. There is a gap between the law and real life in other areas as well.
Trade unions and employers want a system of electronic work record cards, like the electronic records and electronic patient histories we are adopting. This is the direction the world is taking, and so it’s absolutely normal for an electronic work record card to become a valid document.
I’m sure that our labour law needs improving. It should meet the challenges of the 21st century and the current needs of employees and employers. We are doing this step by step.
- The Government is planning to introduce an effective contract in the budget sphere on January 1, 2013. But initially it is necessary to formulate the requirements, job content and assessment criteria for every employee. This concerns thousands of jobs. Will they manage to do this by January 1? How will an effective contract evaluate the operation of small rural schools and medical clinics?
Olga Golodets: We don’t need to formulate specific requirements. We are only setting a general objective for specific sectors. An employee’s manager formulates the requirements on work performance. The manager’s objective is to choose the evaluation method and criteria and achieve a result. The effective contract system will launch on January 1.
- The second discussion of the 2013 budget has taken place in the State Duma. Are you satisfied with the planned allocations in the social sector? Does the lack of funds for education and science seem to be a purely economic problem or does it reflect a lack of understanding about the importance of these things?
Olga Golodets: Currently, education, healthcare and culture are underfunded, and this is noticeable. In fact, last week the Prime Minister signed an instruction allocating additional funds for the construction of perinatal centres and for the resolution of problems faced by kindergartens, which I mentioned earlier. Draft state programmes in the social sector also reveal divergences with the budget because the social sector needs serious development. And the country’s leadership understands this perfectly well. In fact, at the Government meeting, the Prime Minister stressed the need for a modernised scenario of healthcare development.
- State medical institutions offer paid services. They often tell patients: you can have a free ultrasound in a month, but you can get it now if you pay. What can you say about this?
Olga Golodets: This is against the law on mandatory medical insurance, because under this law a clinic can take payment only for non-standard services. If your doctor sends you in for an ultrasound, and they ask for money to reduce the wait time, this is against the law. You can call to the healthcare department in your town, and they will remedy the situation. But if a patient wants to have an endoprosthesis, which is not included in the standard programme, this is a paid service.
- Boards of trustees will be introduced at the leading federal medical institutions by the end of the year. Why? Will head doctors oppose this? Does the legal framework exist for them?
Olga Golodets: I think this is an important systemic measure aimed at developing our healthcare system. Boards of trustees are necessary; they are an oversight tool for civil society. Engaged citizens will be able to help increase efficiency of medical institutions, identify problems and foster dialogue with people. Some head doctors oppose this – they are generally the heads of those institutions that are the greatest cause for concern.
- What do you think about theatres that have been headed for decades by their founders, what is their future in your view? What have our officials and lawmakers learned from the conflict with Yuri Lyubimov in the Taganka Theatre? Do you support the resolution of personnel problems along the lines of the Gogol Theatre?
Olga Golodets: A theatre director has to combine creative talent and managerial skill. It is necessary to take considered decisions in this sphere. It is relatively easy to make a mistake – it is very difficult or even impossible to remedy such mistakes. This is the difference between culture and many other spheres.
But at times it is necessary to give a nudge to this or that group. Groups can experience systemic failure and do bad work – in this sense, culture is similar to other spheres. I don’t think it is right to judge specific decisions. It is up to the spectators to make the final judgment on whether a cultural project is a success or a failure.
- Budget funding for civilian research amounts to 1 trillion roubles over three years. The share of the funding received by the Russian Academy of Sciences is only 10%. What will the remaining 860 billion be spent on?
Olga Golodets: Almost all departments spend funds on research. A three-year plan for funding research will make it possible to implement many ambitious projects. In 2013, it is planned to spend 342 billion roubles on research, including 128 billion that the Ministry of Education and Science will distribute between academies of sciences and the largest educational institutions. Among departments, the Federal Space Agency will get the largest share of funds, 89 billion roubles. The Ministry of Industry and Trade will get a 37 billion allocation to develop civil aviation programmes, primarily for the construction of airplanes for local, interregional and regional transport. The Nuclear Energy State Corporation (Rosatom) will get 13 billion roubles for research, the Kurchatov Institute will get 7.7 billion roubles for pharmaceutical research, the Academy of Agricultural Science will get 7.6 billion, the Academy of Medical Sciences will get 6.2 billion, and so on.
There are strategic research plans. For example, the Federal Medical and Biological Agency works on cellular research that takes more than one year. The results of this research were used in treatment of those injured by the fire in the Khromaya Loshad night club. Unique skin graft operations have been carried out. This was a breakthrough in Russian medicine.
The Kurchatov Institute has been developing a special system for targeting medications precisely at the affected region to reduce the effect of the medication on other healthy body parts and systems. This is also a unique design.
- The global problem in science is a shortage of young specialists. They refuse to work in science not only because of low wages but also because of the lack of opportunities for career advancement. What can be done about this?
Olga Golodets: According to our data, currently young people have started to come back to science. The situation is changing. In 2000, we had only 45,000 researchers under the age of 29; and currently we have more than 75,000. Russia, as co-author, participates in a number of international research projects conducted in Europe. Teams of scientists invite young specialists. The latter have an opportunity for professional growth and self-fulfilment. The Kurchatov Institute participates in several of the largest international research projects, such as the creation of the European x-ray free electron laser (European XFEL) or the International Thermonuclear Experimental Reactor (ITER). The results of this joint research will belong to the countries supporting the project.
