Putin says Russian pension system may collapse

On Friday, Russian President Vladimir Putin commented for the first time on the bill to increase the retirement age , which had its first reading in the State Duma the day before.

According to him, to leave the pension system in its current form would be tantamount to “trickery”, because either the system itself will “give out”, or the budget, which is paying for roughly half of its expenses (3.3 trillion rubles out of 7), will.

“For five pensioners there are six working persons today, and the situation is going to change, and not in favour of the working persons. Their numbers are going to decrease. And quite quickly, the time will come when the number of working persons compared to the number of non-working persons will also decrease,” Putin explained. “And then either the pension system will give out, or the budget and the reserve funds, which we are using to finance the pension system’s deficit today, will give out,” TASS cites the Russian president as saying.

In this case, “we would have to constantly keep pensioners’ income on a low level, and they would constantly add to the number of so-called poor people… And we need to increase people’s income so that the number of poor people goes down,” the president emphasized.

However, “today’s government would simply be tricking people if it said that everything is fine, let’s wait another five, seven, ten years. It won’t stop there, it will still be necessary to make some radical decisions,” Putin warned.

Putin emphasized that the final decision concerning the raising of the pension age has not been made, and that he intends to consider all points of view, aside from those aimed at self-promotion.

According to the Russian Ministry of Finance, in 2018 the expenditure on pensions from the federal budget was reduced to 407 billion rubles.

The reform plan proposes to increase the retirement age from 60 to 65 for men (by 2028) and from 55 to 63 for women (by 2034). It would reduce the number of pensioners by 7 million and save the budget 1.5 trillion rubles over the next 6 years, according to an earlier estimate by Raiffeisen Bank.

  Russia, pension reform, Vladimir Putin