Sergei Mironov, head of the Fair Russia – For Truth party and a State Duma deputy, made a proposal to return pension savings to Russian citizens that were formed before the 2014 freeze. The representative of the lower house of parliament claims that this money “is melting before our very eyes because of the rate of inflation.” The freezing of the funded part of the pension was extended several times; in the latter version, payments were suspended until 2023. Under what conditions it will be possible to count on the defrosting of the funded part of the pension and how much money there will be after all the reforms, experts told MK.
Mironov called on the state to recognize the “failure of the funded system” and return the money to citizens. “After the freeze in 2014, the funded component of the pension system has lost all meaning. If no one dares to reform and put in order the pension system, let’s at least return to citizens the savings formed before 2014. Now this money is a dead weight, and inflation is turning it into dust, ”the deputy said.
He believes that this money should be transferred directly to citizens, and not to private pension funds (NPF). The current pension system is confusing and not credible. Most of the elderly simply do not understand where they will need to apply for the funded part of their pension, which can lead to an increase in fraud.
Recall that quite recently – at the end of September – the Ministry of Finance approved the third version of the pension savings system. We are talking about an attempt to revive the funded part of pensions that was “frozen” in 2014. At a meeting with Finance Minister Anton Siluanov, it was decided to transform the accumulative component of the OPI (compulsory pension insurance), which was “frozen” seven years ago, into a voluntary NGO (non-state pension provision) scheme with uniform rules.
Mironov’s initiative, with all its social significance, is unlikely to find support, and there is nothing to implement it – there are simply no opportunities in the budget today to change the approach to the funded part of pensions, experts interviewed by MK say.
Evgeny Gontmakher, Doctor of Economics, Professor:
“In 2014, the accumulative component of the pension system was frozen. Prior to that, 6% of the insurance contributions of working citizens out of 22% went to separate individual accounts for further investment and capital formation by the time citizens retire. We are talking about citizens born in 1967 and younger. Since 2014, 6% of contributions have ceased to go for these purposes, and since then all 22% have been sent to the general piggy bank for current payments to pensioners. But at the same time, the money that had accumulated in these accounts until 2014 was not frozen in the literal sense of the word. They keep investing. But during the operation of this system since 2003, as a rule, a very small amount has accumulated on the accounts. People have the opportunity to receive this money even now – upon entering retirement.
If we talk about those who are still far from retirement, then they have small amounts on their accounts during the operation of the system, a maximum of several tens of thousands of rubles. Having received that kind of money in cash now, people will not particularly notice it in their personal budget. Meanwhile, even these small funds can be invested in such a way as to compensate for inflation, so here you can argue with the respected deputy. Because in NPFs and management companies, this money does not simply lie in the accounts, it has already been invested and, most likely, in the long-term. Accordingly, if these funds are withdrawn, then financial organizations will have problems, and the citizens themselves will not even feel a special increase in their budget. If hundreds of thousands or many millions of personal savings were kept there, then it would be possible to talk about something, but it turns out that the game is not worth the candle.
As for the freezing itself, this is, of course, a big problem. The government must decide on the fate of the mandatory funded part of the pension. The money there is small and it will constantly decrease, because those young people who have just entered working life after 2014 do not have savings accounts, and those who retire take their savings.
The fate of the mandatory funded part needs to be decided. It will melt if nothing is done. It would be better if the State Duma deputy came out with a concrete proposal to reform the mandatory funded part of the pension, and not engage in populist calls: “Let’s give people money back.” It’s unproductive. “
Georgy Ostapkovich, Director of the Center for Business Studies, National Research University Higher School of Economics:
“From the point of view of social justice, the State Duma deputy, of course, is right. But we need to soberly assess the capabilities of the Russian budget. At the moment, it is difficult to imagine that it will be possible to return the money that was frozen in 2014. There are trillions of rubles in total. This amount is now unrealistic to return. We must give the government its due: it does not say that citizens have said goodbye to this money forever. It’s just that at the present time the budget does not allow us to return these funds to the Russians, especially after the pandemic drawdowns in the economy. You need to proceed from reality. Such a maneuver is impossible today.
It will be possible to raise the issue of defrosting when the economy begins to grow rapidly. This year we are promised growth of 4% of GDP, next year – at least 3%, and if real budget replenishment begins, then, perhaps, in part, in separate tranches, these savings will be returned to citizens within 10 years. But for this it is necessary to make an economic breakthrough so that the economy grows above the world average levels, the incomes of the population increase and the budget is replenished at an accelerated pace. And if the economy does not grow, then the taxable base, from which money is paid to pensioners, does not increase either. So we need to switch to sustainable development so that the well-being of people grows, and only then it will be possible to resolve the issue of payments to pensioners. “
Read also: The funded pension in Russia will not decrease for the first time
.