Pension scoop

Retirement "scoop"
The start of a new pension reform is scheduled by the government for 2014. So far, the relevant ministry - health and social development - has outlined only its general outlines. The main point of the proposals of the Ministry of Health is the rejection of the pension formula of 2002, thanks to which, for the first time in domestic practice, a mandatory funded system was put into effect. The ability of working citizens from a young age to save for their own old age is the cornerstone principle of pension models used in all the leading economies of the world. It would seem that our authorities also needed to develop, advertise, improve such an approach ... But the music did not play for long. The next reform seems to put an end to the hopes of those who were going to save up for a decent old age.

The secret of the fourth point Since 2014, the Ministry of Health has been proposing to switch to a new formula for calculating pensions, which boils down to four points. First: the maximum pension of 75% of the salary is possible only if you have 30 years of service. Second: restrictions are introduced on the maximum salary from which contributions to the Pension Fund are taken. What they will be is still unknown. For example, now pensions are accrued based on a salary cap of 463,000 rubles a year, or about 39,000 rubles a month. You can earn at least a million dollars a month, but you will only receive a pension at the rate of 39 thousand rubles - and not a penny more. Third: pensions will be indexed in accordance with the growth rate of inflation and the average salary in the country. And finally, the fourth: the government has the right to adjust the amount of pensions based on demographic and macroeconomic circumstances.

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In old age, dear fellow citizens, you, as in the "scoop", will depend on the mercy of the state, which will pay you as much as it can

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One can still argue about the validity of the first three points. For example, the fact that the inclusion of a factor of 30 years of experience in the formula is actually identical to raising the retirement age, at least for women, whose work experience in Russia is now often less than 30 years due to maternity leave and time to receive higher education. But all these arguments completely make senseless the fourth point. If we translate it from the bureaucratic language into Russian, then it means the following. The government has the right to say at any time: "Guys, we have a bad macroeconomic situation, so we are introducing a reduction factor when calculating pensions."

The presence of such an item means only one thing: the government is confident that things will be bad with the economy in the near future. Because the pension system does not exist on its own: it is based on deductions from salaries, and salaries, in turn, depend on the state of the economy as a whole. The authorities are “laying straws” in advance and are ready, if necessary, to save on the money of future pensioners.

Is hoarding harmful? One of the main intrigues of the new reform: what will happen to the funded part of the pension? Those four points that were published by the Ministry of Health do not give an answer to this question. Presumably not by chance. The fact is that the principled position of the ministry is to eliminate this part of the pension altogether. Another thing is that it is simply impossible to do this. After all, since 2002, for each employee born in 1967 and younger, his employer transfers a certain percentage as part of insurance premiums (previously as part of the Unified Social Tax) to the funded part of the pension. Previously, these transfers were 2%, then - 4%, and since 2011 - 6%. In just 9 years, almost 1 trillion rubles ran up.

The Ministry of Health would prefer not to save this money for old age for future pensioners, but to plug a hole in the budget of the Pension Fund of the Russian Federation (its deficit is just about 1 trillion rubles). But the ministry has no right to just take and spend this money. To do this, a tricky method was invented: anyone who wishes gets the opportunity to write an application to the Pension Fund - they say, I ask you to transfer the funded part of my pension to the insurance one. If you didn’t write, then your money continues to accumulate, as before. But if I wrote it, then I'm sorry: this money is withdrawn from investment, and the Ministry of Health and Social Development gets the opportunity, at the behest of the employee himself, to spend it not on this very employee, but on today's pensioners.

Well, in order to push people to the right decision, the Ministry of Health and Social Development skillfully operates with numbers. Its officials say: look, by 2022, when most women born in 1967 will retire, they will have an average of 100,000 on their account. And if you divide this amount by the entire period of survival (the average period from the moment of retirement to the moment of death), then you get an additional 600-700 rubles per month. Sparsely, even against the background of the current small pensions (their average size has approached 10 thousand rubles a month). So wouldn't it be better to secure this money by converting it into government obligations, from which the future insurance part of the pension is formed? That is, officials are leading people to the conclusion that it is pointless to save money for old age - they will burn out anyway.

What is the possible alternative to this predatory option? It lies in the fact that the funded part of the pension should not be curtailed, but, on the contrary, expanded. Yes, you need to look at things realistically: those who are over 45 today are unlikely to have time to save serious amounts within the framework of the current pension system. But those who are young and just starting out in the labor force may well take care of their pensions in their own hands. For them, contributions to the funded pension system should be raised sharply - up to 10-15% of the salary. Then there is a chance that by old age they will have accumulated an amount that will supplement the insurance part of the pension not with several hundred, but with several thousand rubles. For the sake of such an increase, it is probably worth working hard throughout your life.

But retirement savings can be successful only if the appropriate infrastructure is created throughout the country. Access to non-state pension funds should be available not only to advanced residents of megacities, but also to residents of absolutely every district of Uryupinsk. It is clear that this is not easy to achieve. It is much easier for the Ministry of Health to wash its hands, which is what it is trying to do.

By the grace of the state, the intrigue with the funded part of the pension concerns only those who are under 44 years old. But even for those who are much older, it is impossible to calculate today how the size of their pensions will change from 2014: the formula of the Ministry of Health still lacks too many components.

However, some conclusions can be drawn. In the coming years, pensions will be indexed to inflation, and nothing more. It is not necessary to hope for an increase in wages with a weak economic growth. And if instead of growth there is a recession, then the state completely reserves the right to reduce pensions at its discretion. This means that in the foreseeable future, a person cannot claim a large pension from the state, no matter how highly paid an employee he may be. As a result, people of the young and middle generation in 20–30 years will receive a pension from the state, the amount of which, in terms of purchasing power, is unlikely to exceed that received by the elderly today, that is, a small one that does not provide a decent life.

In fact, the Ministry of Health brings us back to the Soviet system of paternalism and dependency. Officials drum a simple thought into our heads: in old age, dear fellow citizens, you, as in the “scoop”, will depend on the mercy of the state, which will pay you as much as it can. And say thank you for it!