OREANDA-NEWS. August 10, 2010. A regular session of FBK Economic Club was held in Moscow ‘Will the RF Pension Fund be Saved by Increasing Retirement age?’. Lead Russian economists within the session tried to estimate if Russia is ready to increasing of retirement age, will this measure alone help to decrease deficit of the Pension Fund and solve the problem of increasing burden of working population for supporting pensioners, reported the press-centre of FBK.

Director of FBK Strategic Analysis Department, Igor Nikolaev noted that increasing of retirement age will not solve all problems of pension system. Tens of milliards of rubles (according to different estimates, from 40 to 90 millions), which Russia can get from increasing of retirement age, will not save the RF Pension Fund budget from deficit exceeding trillion rubles. “The main danger is bringing the whole Pension Reform down to increasing of retirement age only. This is wrong. If the RF Pension Fund budget is deficient, this measure will not help it, the system itself, its operating essentials need changes”, the economist believes. At the same time, according to Igor Nikolaev, this does not mean that idea of increasing of retirement age should be abandoned. “Everything should be done reasonably, gradually – e.g. schemes used to reform pension systems by France, Germany and other developed countries should be applied”, Igor Nikolaev concluded. Besides, according to the economist’s estimates the longest life span when retired belongs to Russian women – almost 20 years.

Evsey Gurvich, Head of Economic Expert Group (EEG) under the RF Government also has no doubt that increasing of retirement age is unavoidable. At the same time he emphasized that to solve the problem of deficit of the RF Pension Fund, issue of premature retirement should be solved and limitations for simultaneous receiving of pension and salary should be introduced. According to E.Gurvich, necessity of implementing comprehensive Pension Reform is reasoned by a number of factors. This is, in particular, deteriorating demographic issue, ratio of working population against population of retirement age, as well too soft requirements in terms of granting of pensions. E.Gurvich noted other alarming numbers as well: about 30% of working population do not pay tax deductions, while the number of our pensioners (due to premature pensions, disability pensions etc.) is almost by one third larger than a number of people of retirement age. Finally, the expert noted, our replacement rate is 18 % while in developed countries it is about 70-75 %.

Aleksander Lvov, Deputy Executive Officer of VTB Non-Government Pension Fund emphasized that the main problem of pension system is lack of money, but not low retirement age. Therefore sources for covering this deficit should be searched for. At the same time, among the main reasons of this ‘pension hole’ the expert named ‘premature pensioners’ (those who possess right to premature pension: employees of hazardous industries, those working at the Far North etc.) and those receiving disability pensions. ‘We can not get away from these groups of population just through increasing retirement age. So the issue of the lack of money will not be solved unless the issue of the source of payment of premature pensions and disability pensions and regulation of their assignment is solved’, A.Lvov explained. Besides he noted that corporate and individual pension agreements of non-state pension funds, short-term as well as long-term ones are concluded according to effective retirement age. According to present retirement age all financial liabilities and provisions of Non-Government Pension Funds are calculated. If retirement age is increased legal collision is unavoidable and issue of reimbursement of expenses to clients emerges.

Evgeny Gontmakher, Deputy Director of Institute of World Economy and International Relations under the Russian Academy of Sciences, member of the board of Institute of Contemporary Development called Pension Reform a large social project “Russian government lost their habit of implementing such projects, this is why the measures taken, including increasing of retirement age, will not solve all problems’, the expert is sure. According to him, if people get retired later, their health in most cases will be seriously undermined, hence they will be receiving disability pension. The problem of deficit of the RF Pension Fund will not be solved by increasing of insurance contributions either: ‘They will just stop increasing salaries so that not to pay more contributions to the Pension Fund, share of illegal salaries will increase’, E.Gontmakher forecasts. According to the expert’s opinion, to lift retirement age the state should suggest the society a sort of compensatory package – in the form of adequate system of care after elderly people and children.