What you need to know about changes in the pension system?
In accordance with federal law No. 350-FZ of October 3, 2018, a gradual increase in the generally established age begins in Russia, which gives the right to assign an insurance old-age pension and a state security pension. The changes will take place in stages over a long transition period, which will be 10 years and will end in 2028. As a result, the retirement age will be increased by 5 years and will be set at 60 for women and 65 for men. In 2018, the retirement age for women was 55, and the retirement age for men was 60.
Increased indexation of pensions
Since 2019, the law provides for an increased indexation of insurance pensions at a rate that outstrips the forecast inflation growth. Old-age insurance pensions for non-working pensioners will grow on average by 1,000 rubles a month, or 12,000 rubles a year.
From January 1, 2020, the indexation of insurance pensions is 6.6%, which is higher than the forecast inflation rate at the end of 2019. The size of the fixed payment after indexation will increase to 5686.25 rubles per month, the cost of the pension coefficient – up to 93 rubles. As a result of the indexation, the old-age insurance pension increases on average in Russia by 1 thousand rubles, and its average annual size is 16.5 thousand rubles.
The increment to the pension for each pensioner is individual, depending on the amount of the pension received. In order to find out how much the pension will increase from January 1, 2020, it is necessary to multiply the amount of the received pension by 0.066 (6.6%).
Example The disability insurance pension of a non-working pensioner is 10,137 rubles. After indexation from January 1, the pension will increase by 669 rubles and will amount to 10806 rubles. Another example The old-age insurance pension of a non-working pensioner is 16,437 rubles. After indexation from January 1, the pension will increase by 1,085 rubles and will amount to 17,522 rubles.
Benefits and guarantees for people of pre-retirement age
For citizens of pre-retirement age, benefits and social support measures that were previously provided upon reaching retirement age remain free medicines and reduced transport fares, a discount on payments for major repairs and other housing and communal services, exemption from property and land taxes, and others.
From 2019, new benefits associated with an annual medical examination and additional guarantees of employment are also being introduced for pre-retirees. With regard to employers, administrative and criminal liability is provided for the dismissal of workers of pre-retirement age or refusal to hire them because of their age. The employer is also assigned the obligation to provide employees of pre-retirement age with two days for free medical examination each year with pay. how much money do you need to retire comfortably?
The right to most pre-retirement benefits arises 5 years before the new retirement age, taking into account the transition period. From 2019 onwards, women born in 1968 and older and men born in 1963 and older have the right to benefits.
The five-year period is also relevant when, when assigning a pension, both the achievement of a certain age and the development of a special experience are taken into account. This primarily applies to workers in hazardous and difficult professions according to lists No. 1, No. 2, etc., which allow early retirement. The onset of the pre-retirement age and the right to benefits in such cases arises 5 years before the early retirement age, subject to one of the conditions: the development of the required preferential length of service if the person has already stopped working in the relevant specialty, or the fact of working in the relevant specialty.
For example, drivers of public urban transport with the necessary special experience (15 or 20 years, depending on gender) retire at 50 (women) or 55 (men). This means that the thresholds for the onset of the pre-retirement age will be set for women drivers from 45 years old, and for men drivers from 50 years old.
The pre-retirement age of doctors, teachers, and other workers, whose right to a pension does not arise from a certain age, but when a special length of service is developed, occurs simultaneously with its acquisition. So, a school teacher who will develop the necessary teaching experience in March 2019 will be considered a pre-retirement from that moment.
Those who have not changed the retirement age since 2019, also have the right to pre-retirement benefits 5 years before retirement. For example, in mothers of large families with five children, it occurs from the age of 45, that is, 5 years before their usual retirement age (50 years). When determining the pre-retirement status in such cases, two factors are taken into account. Firstly, the basis that gives the right to early assignment of a pension – it may be the required number of children, disability, work experience in hazardous work, etc. And secondly, the age of the pension itself, from which the five-year period for granting benefits is counted.
An exception not covered by the 5-year rule is tax relief. They are provided upon reaching the previous retirement age limits. For most Russians, this is 55 or 60 years old, depending on gender, and in the case of early retirement people – earlier than this age. For example, for northerners, who, according to the previous legislation, retire 5 years earlier than everyone else, the pre-retirement age for receiving tax benefits is 50 years for women and 55 years for men, respectively.
Confirmation of pre-retirement status
The Russian Pension Fund has launched an information service through which information is provided about Russians who have reached pre-retirement age. This data is used by authorities, departments, and employers to provide appropriate benefits to citizens. For example, employment centers, which since 2019 have been providing pre-retirees with increased unemployment benefits and are involved in professional retraining and advanced training programs for pre-retirees.
The FIU data is transmitted in electronic form through the SMEV channels, through the Unified State Information System for Social Security (EGISSO), and electronic interaction with employers. A certificate confirming the status of a person as a pre-retirement is also provided through a personal account on the Pension Fund website and in the territorial offices of the Pension Fund.