Russian retirement ages to rise as demographics squeeze pensions pot
Russia has announced a rise in the retirement age, with the goal of avoiding deficits in the state pension fund as the proportion of pensioners to taxpayers grows within an ageing population.
Last month, Russian prime minister Dmitry Medvedev set out a series of rises in the age at which people are entitled to start drawing a state pension. The current retirement age stands at 55 for women and 60 for men – one of the lowest amongst European countries – and a third of people retire even before those ages, making use of early retirement schemes targeting public sector workers such as teachers and doctors.
From 2019, the retirement ages will creep up each year, rising by six months for men and three months for women. Eventually pensionable age will reach 65 for men over the nine years to 2028, and 63 for women during the 15 years to 2034.
Demographic pressure
If the government doesn’t act, Medvedev warns, the size of pensions will have to fall. But by raising the age, the government hopes to see pensions rise by 35% by 2024 – hitting the targets set out by the International Labor Organization, which suggests that pensions should be not less than 40% of a country’s average salary in the country. Currently, pensions stand at about 30% of the average wage: 13,342 rubles per month (€180 or US$210).
The national government says that raising the retirement age will help to save around 1 billion rubles (€14m or US$16m) in the first 10 years. During this time around 1.5 million Russians will have to retire later than under the current system.
The state also plans to announce some special benefits for those whose pensions eligibility is being delayed, with the Ministry of Labour suggesting that they may include training and education intended to help ageing citizens find work as they draw close to retirement.
About Anastasya Manuilova
Anastasya Manuilova is an economics reporter for the Russian newspaper Kommersant, covering welfare, labour markets, demographic change and the pharmaceutical industry
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This article is not balanced as it lacks a key piece of information. Life expectancies in Russia at birth (2017 estimates) is Male 65.3 years; Female: 77.1 years. Thus raising the pension age for men to 65 will mean that most men will die before they reach retirement age. Women will have an average of 1s years after retirement.
It’s more complicated than life expectancy at birth. You could have a high infant mortality rate in a society and have most of those who survive childhood live to be 90. Thus, most of those who pay into the system enjoy the retirement benefits for years. More relevant would be life expectancy when one reaches working age.