Pension Fund of the Russian Federation

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Pension Fund of the Russian Federation
Пенсионный фонд Российской Федерации (ПФР)
Logo of the Pension Fund of the Russian Federation
Federal service overview
FormedDecember 22, 1990 (1990-12-22)
HeadquartersShabolovska ulitsa, dom 4, Moscow, Russia
Federal service executive
  • Sergey Chirkov[1]
WebsitePfrf.gov.ru

The Pension Fund of the Russian Federation (PFR) (

Federal Subjects of Russia.[citation needed] The labor collective FIU - is more than 133 thousand social workers.[clarify
]

The State Duma decided (July 5, 2022[3]) to fuse this fund with the Social Insurance Fund of the Russian Federation and to create a united social fund under the title Pension and Social Insurance Fund of the Russian Federation since January 1, 2023.

History

The Russian Pension Fund experienced three major changes from the

Russian financial crisis of 2008, leading to another round of reforms in 2010. These reforms would combine the set pension for elderly and disabled with the pay-as-you-go system, simplifying the overall fund.[5]
As Russia's working population stabilized after years of decline, the fund too could begin to stabilize. From 2019, a gradual hike of the retirement ages was started (the new level of 60/65 for women/men should be attained in 2028).

Functions

Among the socially significant functions of the Pension Fund of Russia:

Payment system and funding

The Pension Fund of the Russian Federation is funded by a mix of state and private employers, through cash transfers into the overall fund from the

citizen, or if no choice is specified, the government itself.[7] This system had numerous issues throughout the 2000s, as a low retirement age along with inability to properly invest funds, led to deficits in the pension budget. Under President Vladimir Putin's first and second term in office, maintenance of the pensions and regular payouts became a priority. This push led to multiple programs designed to encourage private savings for citizens, and for employer based pensions separate from the government's budget.[7] With efforts by the Russian government, basic pensions became near universal for Russian citizens. Heavy transfers from the Russian budget to the Russian Pension Fund, along with steady payroll contributions from the newer working class stabilized much of the pension's throughout the 2000s, until further reforms were needed to address demographics issues.[8] The payment system of the Russian Pension Fund however, is viewed as instable in the long run at the given standard, with a raise in the retirement age being cited as the easiest and most prevalent issue to solve.[8] Pushes towards privatization in the 1990s, along with the encouragement of private accounts, became the government strategy in handling the pension system. However, the newer Russian economy was still heavily dependent on state involvement, and private involvement remains inefficient at curtailing budgetary crises.[8] Despite the burden the low retirement age causes, reformation of the pension system and raising of the age remains inherently controversial in Russia. Fear of losing pensions, or of longer careers than intended, fuel popular resentment of politicians aiming to change the system. As pension reform and saving the pension remains controversial, it is unlikely that dramatic change would occur out of fear of upsetting the voting base.[9]

Russia's pension system is paid either through employers, who take 22% of the payroll to accommodate for costs of pensions, by individuals themselves, who pay around 14,000 Rubles (218 USD) per month towards pensions on a maximum of 512,000 rubles (US$7,974) per year, or by regional governments who directly pay into the pension funds of their areas. Benefits and rate of pensions adjust overtime with inflation and the average wage.[10] Due to the decrease in population for several years, and estimates of slow population growth, fears over the Pension Fund's ability to finance the pensions remain prominent in political discussion. Pensions remain the largest single budgetary obligation of the Russian Federation, which will most likely put increasing strains on future Russian development due to population woes.[11]

References

  1. ^ "Михаил Мишустин назначил Сергея Чиркова временно исполняющим обязанности главы ПФР". government.ru (in Russian). 2022-07-31.
  2. ^ Постановление Верховного Совета РСФСР № 442-1 "On the Organization of the Pension Fund of the RSFSR" Archived 2013-01-20 at the Wayback Machine
  3. ^ See bill № 127389-8 on the website of the State Duma (in Russian).
  4. ^
    JSTOR 10.3138/9781442679917.8
    .
  5. ^ a b "Reforming the Public Pension System in the Russian Federation : Reforming the Public Pension System in the Russian Federation". Retrieved 2016-11-28.
  6. ^ "Private Pensions Series, Books / Private Pensions Series / No. 7 – Reform and Challenges for Private Pensions in Russia" (PDF). www.oecd-ilibrary.org. Retrieved 2016-11-28.[permanent dead link]
  7. ^ a b Tiffin, Andrew (July 11, 2008). "Russian Federation : Selected Issues" (PDF). imf.org. International Monetary Fund. Retrieved 2016-11-28.
  8. ^ a b c Clements, Benedict. Eich, Frank. Gupta, Sanjeev. (2014). Equitable and Sustainable Pensions (PDF). Washington D.C.: International Monetary Fund. pp. 26–28.{{cite book}}: CS1 maint: multiple names: authors list (link)
  9. ^ "Books / Reforming Public Pensions:Sharing the Experiences of Transition and OECD Countries". www.oecd-ilibrary.org. Retrieved 2016-11-28.
  10. ^ Policy, U.S. Social Security Administration, Office of Retirement and Disability. "Social Security Programs Throughout the World: Europe, 2012 - Russia". www.ssa.gov. Retrieved 2016-12-02. {{cite web}}: |last= has generic name (help)CS1 maint: multiple names: authors list (link)
  11. doi:10.3386/w19608
    .

External links
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