Russia will raise the retirement age and “freeze” pensions for 20 years

In the target version of the macro forecast-2035, suggesting the increase of Russia’s economic growth to rates above the world average, the Ministry of economic development of the Russian Federation lays almost zero real growth in pensions over the next 20 years. About this “Vedomosti”, the disposal of which is a specified document.

To increase the rate of economic growth offered by increasing employment, increasing investment activity and labour productivity. Employment growth is achieved in particular by increasing the retirement age to 65 years for men and 63 years for women, to be presented in the forecast of demographic parameters.

The number of pensioners by 2035 in Russia should be reduced by 23%, or 7 million people, compared with 2017 (without the reform – increase of 5.4 million people) with an increase of employed per 1 million (without reform, a reduction by 3.2 million).

“However, raising the retirement age is accompanied by a sharp drop in the level of pensions: their relation to wages (replacement ratio) falls from the current 35% to 22%. Thus, from the implementation of the plan to increase economic growth at least a fifth of the population not only did not win, but, on the contrary, loses: their incomes compared to other highly reduced”, – notes the edition.

Double reduction of the replacement rate and the number of retirees – almost twice reduce the ratio of pension payments to payroll from 28 to 15%. Then investment can grow in 1,5–2 times faster than the economy, productivity faster than wages.

In case of successful implementation of reforms, according to the forecast, economic growth will reach 3.5% by 2026, and then slow somewhat but by that time, global growth will be lower, it expects the Ministry of economic development. In the end, the real incomes of the population, over the past three years have fallen by 10%, only by 2022 destinat pre-crisis level in 2013, follows from the forecast.