Recently, Russian President Vladimir Putin approved and signed a bill to increase the minimum wage to the subsistence level, so many pensioners are wondering whether this will affect their pension payments. Whether we should expect an increase in pensions, and from what date by how much they can be indexed, everyone needs to know.
Despite the fact that from May 1, the category of working citizens will begin to receive wages taking into account the increase in the minimum wage, pensions for non-working citizens will not be indexed. This is due to the fact that the planned increase social payments already took place in February of this year, 2018 and in April. The next indexation should now be expected no earlier than August.
At the same time, after the upcoming recalculation, the final amount received by the pensioner will directly depend on the size of the salary and the money transferred to the Pension Fund of the Russian Federation. It is worth noting that last year the indexation of payments to Russians who retired was 1.5%. This year, an increase in amounts of 1.2% was expected, after which information appeared about an increase of 4.1%. But the latest news does not please pensioners at all, since some sources report an increase of 2.9%. Thus, after the summer recalculation, the pension will be 255 rubles more and its amount will be approximately 9 thousand.
To whom and by how much will pensions be raised from May 1, 2018?
The minimum wage can and will only affect the size of pensions assigned differently pension law, where pensions are assigned based on average earnings, length of service and the category of the recipient of such pensions, these are, first of all, officials / civil servants /, as well as military personnel, participants in the Great Patriotic War, victims of man-made disasters. For “ordinary” state employees, an increase in the minimum wage will also not bring an increase in either wages or pensions, unless if they received a pension or a salary below the minimum subsistence level, then they will be brought up to the established minimum wage level from May 1, 2018.
Analysts greeted these actions of the authorities very coldly, where again the officials are on the “horse”, whose pensions are not bad anyway, and besides, all this will not, in their opinion, lead to a reduction in poverty in the country. For some reason, they don’t say that the same income tax - 13% - is taken from the minimum wage as from other salaries exceeding the minimum wage. It turns out that if the minimum wage is set at 11,163 rubles from May 1, 2018, and a tax of 13% is withheld from the minimum wage, then the employee will receive only 9,772 rubles, which again will not be one hundred percent of the minimum subsistence level, but only 87 percent! There are proposals from deputies and other officials to introduce a tax on pensions as well.
Problems of pensioners, lack of funds are always a pressing and painful problem for the authorities and the government.
As you know, the next indexation of pensions for pensioners will be on April 1, 2018; as usual, they increase in April social pensions, or rather the pensions of disabled people, that category of people who have no other sources of income other than pensions. This category of pensioners is less protected.
In the same time another promotion pensions will take place in 2018 also from May 1. This increase is connected with the government’s decision to increase the minimum wage from May 1, which will be 11,163 rubles. Therefore, the pensions of those citizens who receive a pension less than the minimum wage will be equated to this amount. So some pensioners will experience an increase in their pension as early as May 1, 2018.
The planned increase in social pensions took place in April 2018, and it seemed that the next increase would have to wait a long time.
From the first of May 2018 by decision of the government, the cost of living will be increased to 11,163 rubles, in connection with this, the size of the minimum pension will also change, it must be no lower than the minimum wage, thus, for pensioners who received pensions in an amount below 11,163 rubles, the pension will be increased to the minimum wage from with the help of special surcharges.
Unfortunately, this increase will not apply to working pensioners.
The next pension indexation will be April 1. The next one will be in a month, although before that it was planned to be held only by 2019.
For the first trimester of this year, the minimum wage is 9,489 rubles.
From May 1, 2018, the minimum wage will be the same as the subsistence minimum for able-bodied citizens, which means 11,163 rubles.
After these changes minimum size remuneration will “comply with the requirements of the Labor Code of the Russian Federation.” After an increase in income, the number of pension points will also creep up.
However, those pensioners who are forced to continue working will remain without recalculation; indexation will bypass them. I hope that at least by the end of the year they will remember them too.
Pension increases are always eagerly awaited, because few people have enough of this payment to live on.
Not long ago there was an April increase. And from May 1, 2018, the cost of living increases from 9,489 rubles to 11,163 rubles. Consequently, the size of pensions will be increased in proportion to the minimum wage.
What is the real economic situation like?
Back in January of this year, a three-time indexation of pensions was announced, which is planned to be carried out in stages. The first stage, for pensioners receiving insurance pension, was held in January 2018 (usually this is carried out from February 1). Earlier payment of pensions to those who receive it in the insurance version became possible due to the fact that the inflation rate in 2017 was a lower percentage, and the pension could be indexed without waiting for the results of the State Statistics Service.
On April 1, the indexation of social pensions began for quite a large number of categories of pensioners, disabled people, orphans, and representatives of nations Far North and some others. The third stage of indexation will begin in August of this year.
On May 1, 2018, the level of minimum wage (minimum wage) was increased to the subsistence level (ML). Now, for a full-time job, a person cannot receive less than 11,163 rubles per month. This is at the federal level. In the regions the situation may change, but only upward depending on local conditions. The size of the minimum wage affects the size of the pension indirectly.
In our country, PM is determined for several categories of the population: children, pensioners, able-bodied citizens. Amounts are calculated depending on the needs of each group. The highest rate is for people of working age. It was at this level that it was decided to establish a new minimum wage.
In our country, pensions are increased in February, April and August. In February they traditionally index insurance payments non-working pensioners. Social pensions are increased in April. And the recalculation of pensions for the working category of pensioners remains for August.
On May 1, 2018, it was not pensions that were increased, but the minimum wage. Previously, a person could work full time and receive a salary below the cost of living.
The authorities decided to correct this situation. The process began back in 2017. In January of this year, salaries were increased even more.
According to the plan, the minimum wage and minimum wage indicators were to be equal next year. But the president of the country said that the country’s economy is now on the rise, so it is safe to carry out the final stage in May of this year, which was done.
Indexation of pensions in 2018
Insurance payments for the non-working part of pensioners have already been indexed by 3.7%. This figure is higher than the inflation rate over the past year, so it is difficult to count on any additional increases.
In April, social pensions were indexed by 2.9%. The government promised a higher percentage, but the cost of living for pensioners, to which this type of pension is tied, increased by 2.9%, so it was decided to reduce the level of the planned increase.
The only procedure that remains this year and relates directly to pensions is the recalculation of payments to working citizens retirement age.
The upcoming adjustment does not require the person’s personal presence and writing an application. Everything happens automatically, taking into account the amount of contributions for the pensioner by the employer to the Pension Fund.
The maximum pensioners can count on is 3 pension points. If you convert them into money, it is about 245 rubles. Recalculation is carried out in individually, so you shouldn’t think that everyone’s amounts will be the same. Based on the experience of last year, experts say that the increase can reach only a few tens of rubles.
The connection between the increase in pensions and the minimum wage indicator from May 1, 2018
The increase in the minimum wage does not directly relate to pensions. That is, one should not expect that all pension payments will be recalculated en masse.
The legislation of our country has a condition that a pensioner whose government payments do not reach the minimum wage must receive social supplements. In other words, if the pension is less than the minimum wage, then the state will compensate for this difference. But this is not an increase in pensions.
There are no further manipulations with pensions planned this year. An increase in the minimum wage directly affects only people of working age, and not pensioners, and one should not hope for a change in pension amounts.
In Russia, on January 1, 2019, a new pension reform was launched, providing for an increase in the retirement age. On September 27, 2018, the State Duma approved in the third (final) reading a bill on raising the retirement age for men up to 65 years old, for women - up to 60. The corresponding law No. 350-FZ was signed by the President on October 3, 2018 (the contents of the law can be found below). The reform will be carried out in stages, starting from 2019 with an annual increase in the standard age by 1 year (except for 2019 and 2020, when it will be possible to apply for a pension six months ahead of schedule).
The standards and procedures for increasing the age established by law were adopted as a result of adjustments proposed by the President. August 29, 2018 in a televised address to citizens President Vladimir Putin ordered to soften pension changes , in particular, to lower the age for women from 63 years previously proposed by the Government to 60, to soften the rate of increase during 2019 and 2020, etc. These proposals were formalized as an amendment to the bill and considered in the State Duma in the second reading of the law. The final draft was adopted on September 27 and signed by the President on October 3.
The adopted law (that is, taking into account the proposals of President Vladimir Putin) establishes that the age will increase annually in 1 year increments, except for the first two years of the law. In 2019 and 2020, preferential retirement will be provided six months earlier than provided new law. It means that:
- Women born in 1964 will be able to apply for a pension in 2019 and 2020. upon reaching 55.5 years of age. Women of 1965 - in 2021 and 2022, reaching 56.5 years of age, etc. until a new single established target is achieved by 2023 age for women 60 years.
- Men born in 1959 will also retire in 2019 and 2020, reaching 60.5 years of age. Men of 1960 - in 2021 and 2022 upon reaching 61.5 years old and. etc. before the new retirement age is set in 2023 for men 65 years old.
Table of increasing the retirement age in Russia by year of birth
Below is retirement schedule from 2019 the final content of the bill to raise the retirement age (or, as they also say - increasing the period of working capacity of citizens) taking into account adjustments, according to V. Putin’s statement:
| Men | Women | In what year will they retire? | ||
|---|---|---|---|---|
| Date of Birth | Retirement age | Date of Birth | Retirement age | |
| I half of 1959 | 60.5 | I half of 1964 | 55.5 | II half 2019 |
| II half of 1959 | 60.5 | II half of 1964 | 55.5 | I half 2020 |
| I half of 1960 | 61.5 | I half of 1965 | 56.5 | II half 2021 |
| II half of 1960 | 61.5 | II half of 1965 | 56.5 | I half 2022 |
| 1961 | 63 | 1966 | 58 | 2024 |
| 1962 | 64 | 1967 | 59 | 2026 |
| 1963 | 65 | 1968 | 60 | 2028 |
The pension age reform will not affect miners, railway workers and other citizens who work in difficult working conditions. For citizens living in the Far North and equivalent areas, this standard is planned to be increased to 60 years for men and 55 years for women (taking into account the Presidential amendment to mitigate pension reform).
Also, in connection with the increase in the retirement age, changes were made to the assignment procedure: the age for assigning such pensions was increased to 65 women and 70 men (now it is 60 and 65 years, respectively - that is, the increase will also be 5 years for women and men).
Why is it necessary to increase the retirement age?
The need to take such unpopular measures is justified by the Government by the fact that (55 and 60 years for women and men, respectively) were established almost 90 years ago, when the life expectancy of people was about 40 years.
Since then, according to the Prime Minister, the situation in the country changed in better side:
The life expectancy of Russian citizens has increased significantly (in the past 2017, life expectancy in Russia, according to official data, was 72.5 years), as well as the duration of its active phase, opportunities and working conditions have improved.
As noted in the Kommersant publication No. 81 (6319) dated 05.15.2018, the funds that will be saved as a result of increasing the retirement age of Russians will be used to implement Presidential Decree No. 204 of 05.07.2018 “On national goals and strategic development objectives Russian Federation for the period until 2024"(the so-called new “May decree” of Vladimir Putin):
- According to preliminary data, for the implementation of national projects provided for by presidential decree until 2024, it will be necessary to allocate 25.01 trillion. rub., of which 17.06 trillion. rub. already included in the budget.
- Most likely, to attract the missing 7.99 trillion to the federal budget. rub. (about 1.3 trillion rubles per year) The government returned to discussing the issue of pension reform in terms of raising the retirement age of Russians.
If the retirement age is raised by five years from 2019, in the hard version, most of the national projects will be paid for with these savings.
Vladimir Putin himself also repeatedly answered questions about the need to raise the retirement age in the Russian Federation, noting in an evasive manner that such measures must be taken very carefully (“everything needs to be calculated”), and all changes in the system pension provision must be done smoothly.
As a response, State Duma deputies from the Communist Party of the Russian Federation introduced bill No. 466379-7 on May 15, 2018, providing for moratorium on raising the retirement age. The draft law talks about establishing a moratorium until January 1, 2030 on amendments to Part 1 of Art. 8 law “About insurance pensions”, which establishes the current retirement age in Russia. The LDPR and A Just Russia parties also don't support the idea of reform based on raising the retirement age, criticizing and reporting that they would be against the stated proposal.
What do the statistics say?
From the demographic forecast of Rosstat it follows that in the long term the share of the population is older than retirement age will increase every year. For example, in 2018 their share was 25.5% of the total population (37,464 thousand people), and by 2030 this figure will increase to 28.3% (41,386.4 thousand people). At the same time, the share of the working age population will decrease from 56% to 54.3% in the corresponding years.
The HeadHunter company conducted a survey of citizens' opinions regarding changes to the retirement age. Only 6% of respondents believe that an increase is necessary. For 53% of respondents, the current conditions for retirement are optimal, and 35% would like the retirement age to be lowered. The remaining 6% found it difficult to answer.
Pensioners are interested in the issue of increasing pensions from May 1, 2018, the amount of increase in pension benefits and the payment procedure. Unfortunately, pensions are not expected to increase in May, since pension amounts for employed older Russians will be recalculated in August. The recalculation will occur due to the next cancellation of indexation.
This year, only two pension increases are planned: in February, insurance (labor) pensions increased, and in April 2018, indexation of social pension provision is planned. The final amount that a pensioner will receive directly depends on the salary and the money transferred to the country’s Pension Fund.
Pension increase in 2018
Although there are no plans to increase pensions from May 1, 2018, pensioners will expect an increase in social pension benefits in April. How much will the payment amount increase, employees told Pension Fund. Last year, there was an indexation of 1.5% for employed and unemployed Russians who retired.
The authorities reported that this year there will be an increase in pension amounts by 1.2%, a little later they spoke of an increase of 4.1%. According to latest news, social pensions will increase by 2.9%.
After the August increase average pension will be equal to a little more than 9 thousand (255 rubles will be added). Deputy Chairman of the Board of the Pension Fund of the Russian Federation Alexander Kurtin noted that in the next reporting periods there will be an increase in pension provision by 3.9% and 3.5%.
About recalculation of pensions
Working older people can count on recalculation. Previously, it was held in August, now some sources talk about the recount procedure, which will take place in April. This may be due to the refusal of employed pensioners to increase insurance amounts in February.
Elderly people who worked last year will receive an increased pension thanks to a non-declaration recalculation. It is still unknown how much the pension provision will increase; last year the increase was 3 pension points (about two hundred rubles).
Russian Deputy Prime Minister Olga Golodets said that the government is striving to increase pensions. The planned pension amount is about 25,000 rubles. Golodets noted that an appropriate strategy has been developed, according to which it will be possible to reach 2.5 subsistence minimums. To such pension payments worth striving for.
