Russia spends on pensions more than developed countries, and the result is worse, but it increasingly difficult to maintain. If nothing changes, soon the entire budget will be spent on pensions, but the country will still not be able to provide pensioners a decent standard of living. This writes a prominent Russian economist Evsey Gurvich (head of the Economic expert group and Deputy Chairman of the Public Council under the Ministry of Finance) in an article published in “Rossiyskaya Gazeta”.

It expert, in the past participated in the creation of the stabilization Fund, the development of a socio-economic strategy of Russia for the period up to 2020 (2012), two of the previous pension reforms and tax reform, proposes to implement during the next reform of the pension system two basic principles: to restore the basic pension, but to use it in new ways – according to the principle needs, and to raise the retirement age.

Russia spends on pensions more than developed countries, and the result is worse, but it increasingly difficult to maintain, emphasizes the economist.

For a long time it was the fastest growing item of expenditure: between 2006 and 2015, it has grown in real terms by 86% while GDP increased by only 17%. However, it is unlikely that retirees consider their pension as satisfactory, since the ratio pension/salary in the end lower than in most other countries.

That is, the expert said, “we spend more, and the result is worse, but even this result is the state is very difficult to maintain”.

Gurvich also notes that “the argument that we have a social state, are not very specific, so it is unclear that it is allowed and what is not”. In any case, even in the most that neither is a social state can not be the whole budget to be spent only on pensions. But if we are not going to reform the pension system, then we get close to this state.

“High pensions are not given for nothing, they are possible when considering means testing and raising the retirement age. In my opinion, we need to restore the basic pension, but to use it in new ways – according to the principle needs.

For example, do not pay her for working pensioners, who receive wages above the average. They are certainly not poor,” writes the economist.

Statistics shows that working pensioners per capita income and a half times higher than the average Russians, and at idle is approximately two times below the average. Wrong to make no distinction between them. What is the point to provide social support to people with incomes above the average? It is better to increase pensions to the truly needy – the unemployed, especially seniors with disabilities.

In his opinion, the retirement age will have to increase.
In addition, in developed countries that we look up to, pay large contributions from the workers themselves and their employers. “In other words, – says the expert – high pensions are not given for nothing – they are held on three pillars: the consideration of means testing, raising the retirement age and higher contributions. And personally, I would have left for our country first two, as the increase in social contributions will greatly slow down the economy and thus salaries and pensions”.

Now, we will remind, the authorities of Russia discuss the next – third over the past 15 years – the reform of the pension system. Its basic idea is that the cumulative part of the pension will continue to emerge, but only on a voluntary basis, due to new contributions of the citizens themselves. Such savings will be introduced income tax credit, and the Central Bank will guarantee their safety.

Thus in the system of voluntary contributions by default, will include all working Russians, but they will have the opportunity to opt-out of these payments under a five-year moratorium.

It is also assumed that the retirement age will be raised to 65 years for both men and women. The increase will be in increments of 6-12 months. The issue of denial of payment of all pensions or its fixed part pensioners who are officially employed.

Expert: if pension system not to change anything, soon the entire budget will be spent on pensions 10.10.2016

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