RBC: the Pension Fund fears a reduction in pensions for non-working citizens when indexing payments to workers

The Pension Fund of Russia (PFR) believes that the abolition of indexation of insurance pensions for working pensioners since 2016 has had little effect on labor market indicators, household incomes and the dynamics of the development of the Russian economy. This was reported RBC with reference to documents.

According to the PFR, the return to the practice of indexing pensions for working pensioners will lead to some negative consequences:

• The level of pensions for non-working citizens will be reduced. Due to the indexation of pensions, it will be necessary to redistribute budgetary funds from non-working pensioners to working ones.
• An additional 0.5 trillion rubles will have to be allocated from the budget. Due to existing financial restrictions, when indexing pensions for working pensioners by 10%, the PFR will need additional funds.

The PFR believes that the insurance pension for working pensioners is a benefit, because they also have a salary. Insurance pensions are allocated to citizens due to disability, including those associated with old age or disability.

In January 2022 the government indexed pensions for pensioners by 8.6%. The average amount of monthly payments amounted to 18,984 rubles. In May in the State Duma reported about plans to introduce an automatic mechanism for indexing pensions and social benefits. The estimated amount of indexation of payments can be 9%. In October, RBC, citing the Ministry of Finance informedthat in the coming years pensions in Russia will grow faster than inflation, but salaries will grow faster. As a result, by 2026 the average pension will be 30% less than the average salary.

Olesya Pavlenko