Named the main risk of recalculation of pensions for residents of the annexed territories

The basis for determining the amount of pensions for residents of the four new regions of the Russian Federation will be the average monthly earnings in the Russian regions closest to them – the Rostov region and the Crimea. This model of a phased transition to Russian pension legislation developed by the Ministry of Labor looks like a frankly forced step, and with very likely risks and costs. The Russian state does not have an accounting base for calculating pensions in these territories, and it does not offer any other mechanisms other than averaging payments.

In general terms, the model repeats the regime that has been in force for Crimea since 2015, but there are also fundamental differences. So, in order to compensate for the higher retirement age in Russia compared to the current pension limits in the DPR, LPR (55 years for women and 60 for men), Zaporozhye and Kherson regions (60 years for both sexes), citizens will be assigned regional payments.

From January 1, 2023, branches of the United Pension and Social Insurance Fund (Sotsfond) will open in new territories. Information about the people living here will be automatically transferred to the federal information system, that is, payments will begin to be made in an unclaimed manner – automatically. Their size and content will be determined in the same way as in the rest of the territory of the Russian Federation: taking into account the length of service and pension points. From the moment the new subjects are admitted to Russia until January 1, 2026, there is a transitional period during which the issues of their integration into the economic, financial, credit and legal systems of the country must be resolved.

The rules developed by the Ministry of Labor will affect 1.6 million citizens of retirement age in the DPR, LPR, Zaporozhye and Kherson regions, the total population of which can be estimated at 7-8 million. According to the Ministry of Labor, federal budget expenditures for the payment of insurance pensions in these regions in 2023 will amount to 368.9 billion rubles, in 2024 – 385.9 billion, in 2025 – 405.8 billion. According to Deputy Prime Minister Tatyana Golikova, in 2022, pensions in the amount of 10 thousand rubles. From March 1, 2023, they will be recalculated for persons corresponding to the Russian concept of “pensioner”.

“We are talking about a forced measure,” says Alexander Safonov, professor at the Financial University under the Government of the Russian Federation. – In the new regions there is no real statistical accounting, we do not know what wages people receive. And we need to start from something in order to calculate, in particular, the subsistence minimum, to which the minimum pension is tied in Russia. Therefore, we had to take as a basis the average wages in the Rostov region and the Crimea, which are more or less comparable in terms of the employment structure and climatic conditions. But there is a risk associated with budget overruns.”

In general, there are a lot of questions to such an “averaged” approach. For skeptics, the people who earn the most will lose, while the poorest will win. But how to determine this highly profitable part, what specifically to rely on when calculating income? The local tax accounting system was fundamentally different from the Russian one. In the case of the DPR and LPR, you can still find some ends, which cannot be said about Zaporozhye and Kherson. Of course, the length of service traditionally tracked by work books can serve as a tool for differentiation. But, firstly, Safonov argues, data on experience is often faked, and secondly, it is often unrealistic to prove its existence, since neither the book itself nor the corresponding contracts with employers have been preserved.

“It is important that initially, during the transition period, the residents of the new territories will be paid not pensions as such, but social benefits,” the MK interlocutor notes. – They will affect not only the holders of a Russian passport, but also those who have not yet become a citizen of the Russian Federation. For this entire category, a single mechanism is being created to ensure the provision of social benefits, which will temporarily replace, replace pensions.”

According to processor Aleksey Zubts, Safonov’s colleague at the Financial University, he sees no particular risks in implementing this model. The expert points to the fact that the economy in the annexed territories, primarily in the Kherson and Zaporozhye regions, is destroyed, the people fled from there. It will take years before the situation returns to normal. And pensions must be paid to residents, and they must be sane so that people do not feel infringed on their social rights. At the same time, one must understand that no confirmation of work experience from Ukraine will be available in the coming years or even decades. Unlike, say, Uzbekistan and Tajikistan, with which Russia has concluded interstate agreements on the transfer of this kind of information. Therefore, the option currently proposed by the Ministry of Labor is the only realistically possible one.