Officials vow to raise the retirement age, the Kremlin fears protests, and labor unions are fuming. This is Russia’s pension reform.
Valery Titievsky / Kommersant
The legislation’s timetable
On June 14, on Day One of the FIFA World Cup, Prime Minister Dmitry Medvedev announced massive changes coming to Russia’s pension system: the retirement age will start rising gradually next year, growing from 55 to 63 for women and from 60 to 65 for men.
On June 16, the federal government submitted its pension reform proposal to the State Duma’s Labor, Social Policy, and Veterans’ Affairs Committee for consideration as legislation. After reviewing the initiative, it will be distributed to regional officials across the country, who will have until July 17 to provide feedback. After a month, the legislation’s first reading should reach the floor of the Duma, where lawmakers aren’t expected to adopt the bill before the fall.
State Duma Speaker Vyacheslav Volodin has already endorsed the need for pension reform, saying, “If we don’t make any decisions, it will inevitably lead to a de facto reduction in pension benefits. We cannot allow that.”
All opposition parties with seats in the State Duma are opposed to raising Russia’s retirement age. The Communist Party argues that the reforms are impractical because of “economic indicators,” and the Communists are calling for a nationwide referendum on the issue. In late July, after the World Cup ends, the party plans to stage protests across the country. The right-wing Liberal Democratic Party has also criticized the government’s pension proposal, saying that many Russians simply won’t live long enough to claim retirement benefits under the new system. Sergey Mironov, the leader of the “A Just Russia” political party, says any talk of raising the retirement age should be postponed until 2030.
According to Andrey Isayev, the deputy head of United Russia’s Duma faction, the legislation’s first reading could reach the parliament as soon as July 19.
Where you at, government?
When explaining the proposed reforms, government ministers have stressed the economic need for a higher retirement age. For example, Deputy Prime Minister Tatyana Golikova said raising the pension age would boost pension benefits by an average 12,000 rubles ($190) as soon as next year. Labor Minister Maxim Topilin has also promised a “serious boost” in benefits, saying that pension payments would rise as much as 10 percent within five or six years.
According to Golikova, the reforms will necessitate the abandonment of the “point system” instituted in 2015, because pensions will need to comprise at least 40 percent of retirees’ lost earnings, once the retirement ages go up. The government is also reportedly developing additional legislation to create a new infrastructure for pension savings, though there are still no details about this project. “The funds that individuals have already saved are there and they’re working, and I think somehow a method will be finalized for how we need to work with pension savings that have already been transferred to non-state pension funds,” Golikova explained.
What say you, Kremlin?
Vladimir Putin has emphatically distanced himself from the discussion about pension reform. Since 2005, the president has promised that Russia’s retirement age wouldn’t rise while he remains in office. When asked about Putin’s role in the current reforms, Kremlin spokesman Dmitry Peskov told reporters that Prime Minister Dmitry Medvedev and his cabinet are responsible for the initiative, claiming that Putin isn’t participating in the process at all. Addressing the president’s past promises, Peskov also stressed that Russia has endured major changes over the last 13 years in demographics, economic development, and global politics, as well as rising life expectancy, that affect the country’s current retirement system.
On June 15, the newspaper Vedomosti reported that sources in the Kremlin say the Putin administration is monitoring reactions to the proposed pension reforms very carefully, exploring options to mitigate the changes, for fear of mass protests. The newspaper’s sources say the president might introduce amendments to the legislation’s second reading. According to Kommersant, the administration even organized a seminar for deputy governors at its headquarters at Staraya Square, where Golikova explained the reforms’ parameters.
On June 18, Peskov denied Vedomosti's report, insisting again that the president currently has nothing to do with the pension reform plan. The Kremlin’s spokesman said the expert discussion about raising Russia’s retirement age is still happening only within Medvedev’s cabinet. President Putin could still veto the initiative, Peskov claimed, but he said the administration hasn’t yet seen the “final outlines” of the government’s proposal.
Chime in, labor unions
The two biggest labor unions in Russia have criticized the government’s pension-hike proposal. Participating in a discussion held by the Russian Tripartite Commission, representatives from the Federation of Independent Trade Unions said lawmakers should reject the government’s plan, while arguing simultaneously that the retirement age for women should rise only to 60, not 63, if reforms are absolutely necessary.
Russia’s second-largest trade union, the Confederation of Labor, launched a petition on Change.org against the pension reforms, attracting more than a million signatures in just three days. (At the time of this writing, the petition had more than 1.7 million signatures.) The petition argues that the authorities can address the pension system’s deficits by cracking down on “informal employment,” without raising the retirement age.
A similar petition appeared on the Russian government’s “Public Initiative” online portal, where it quickly attracted the 100,000 signatures necessary for consideration by a government “expert group.” That review board can either submit the petition’s demands to lawmakers for legislative consideration or — more likely — it will simply ignore them.
Boris Kravchenko, the president of Russia’s Confederation of Labor, has promised more “active” measures, in addition to the petition. He says his organization will create a public headquarters to coordinate nationwide protests against higher retirement ages. “We’re exploring any peaceful protest methods and ways to express our opinions that are available while public assembly restrictions are in place because of the soccer championship,” Kravchenko told the magazine RBC.