The government has made alternative pension reform

The Minister of labour Maxim Topilin

The Ministry of labour and social protection sent a letter to the government with proposals for “improving the pension system in the context of new socio-economic challenges” (have RBC). To prepare proposals the Department has instructed Prime Minister Dmitry Medvedev at a meeting on 18 February. About these offers, know the employees of the FIU and an official in the government.

It is necessary to provide an acceptable level of pensions, but to reduce the dependence of the pension system from transfers from the Federal budget, said in a letter to the Ministry of labor, signed by the Minister Maxim Topilin. At the same time improving the pension system should not lead to additional expenses of the budget until mid-2018 and to social tensions in society.

The Ministry of labor proposes seven changes. First, to increase the rate of insurance contributions. Now the employer pays for each employee to the pension Fund with a contribution of 22%. This takes into account the limiting size of base for charge of insurance payments which is considered from the beginning of the year cumulative and includes all benefits and remuneration. In 2016 it is 796 thousand rubles. If the size of the salary of employee more than this amount, the employer pays another 10% of the “surplus”. The Ministry of labour there are two options how to change tariffs either to increase the total contribution from 22% to 26%, but the lower contribution rate levied on wages in excess of base by 1.25 percentage points, to 8.75%; or leave the total rate unchanged, but gradually (by 2% per year) increase over base rate to 20%.

The first option will increase the receipts of insurance contributions to the pension Fund by 56.4 billion rubles in 2017, 125.8 bln. RUB. in 2018 and 208.9 m bn in 2019. The second option would increase revenues by 53 billion rubles, to 107.8 billion RUB and RUB 163,4 billion in 2017-2019 years, said in a letter to the Ministry of labor.

Together with the tariffs of the Ministry of labor proposes to gradually increase and the minimum experience required for eligibility to a pension insurance, from 15 to 30 years. This will enable you to save some of 60.5 billion rubles. for three years.

Dorozhniki and beneficiaries

The Agency proposes 2017 is almost double the additional contribution rate for employment in hazardous work: if now for workers of hazardous production (e.g., miners), the employer contributes additional 8% of salary, will be 15%; for employees of hazardous production depending on the subclass now will be deducted from 2 to 7%, the Ministry of labor proposes to increase 5-11%. The citizens of these categories are entitled to retire.

This measure will increase revenues in the budget of the FIU for 238,9 bn over three years.

Teachers, health professionals and creative workers the Ministry of labor suggests to deprive of the right to early retirement at all. Today, they have the right to retire after 25-30 years. The Agency proposes to increase the required period to 40 years, but do it gradually in 2017-2020 to add for three months, and from 2021 six months in the year. The measure will affect 48,52 thousand people and will save on payments 1.44 billion in 2017, of 3.05 billion rubles in 2018, 4,78 billion rubles in 2018.

For self-employed the labour Ministry has prepared the increase in contributions more than doubled. Now individual entrepreneurs are obliged to pay insurance contributions to the pension Fund for yourself is based on 26% of the minimum wage per month. From 1 January 2016, the minimum wage is 6.2 thousand. RUB., and mean annual payment PI to the pension Fund will be of 19.36 thousand RUB, the Agency proposes to annually increase the contribution of 0.2 of the minimum wage to two minimum wage. In this case, the payments to the pension Fund of entrepreneurs can be increased not twice, but more significantly, as both will grow and the minimum wage. So, from 1 July 2016, the size of the minimum wage will be increased by 21%.

Also the Ministry of labor proposes to change the mechanism of granting of industrial benefits on contributions. For example, now IT companies deduct the FIU is not 22%, as all but only 8% of the participants of the project “SKOLKOVO” 14%, pharmacy 20%. In the future, the Agency proposes to provide state support to those companies not at the expense of system of obligatory pension insurance, however, the letter says nothing about alternatives. In addition, the Ministry notes that there should be a moratorium on new concessions.

The last sentence of labor for a mandatory funded system the Agency proposes to cancel it. The letter States that should the establishment of a voluntary funded system and to shape it not at the expense of the contributions that could be going to FIU (6 of 22%) and own funds of citizens.

Thanks to all these measures the total volume of transfers from the budget to the pension Fund may decline to 109.6 billion rubles in 2017, 180,3 billion rubles in 2018 and 343,8 billion rubles in 2018. If the estimate of the transfers from the budget to the pension Fund in percent of GDP, it will drop from 2.7 to 2.6% in 2017 to 2.5% in 2018 and 2.3% in 2019, the letter said.

Will the use?

Economists and entrepreneurs have different opinions of the proposals of the Ministry of labor. Indeed, the need to reduce benefits and increase the experience for teachers and doctors, says the Director of the Fri Vladimir Nazarov. “To increase the length, too, but you can do it gently enough. To all the rest of the population, indeed, in most countries more stringent requirements for seniority pensions insurance,” he says, adding that the gradual movement to 30 years of experience is the right solution.

However, to increase the burden on individual entrepreneurs is not worth it, he said. “This rake we’ve come increased contributions for self-employed and got a very sharp negative reaction of businessmen. This is a politically sensitive issue, and money will receive not so much,” says Nazarov.

“The amendment means that this amount is about 4 thousand per month after the increase in the minimum wage I’ll have to deduct from its own profits. However, I do not know where these deductions go,” said the individual entrepreneur Kirill Zharkov (provides services PR consulting).

Co-owner of a Bridal salon “Mary Truffle” Meteleva, Alexander says that for her volume of sales (proceeds of about 2.1 million rubles. per month) this measure is not very critical: “Now we pay 1,5 thousand rbl. a month, and will be about 3 thousand”. “But for those who are just starting or perhaps holding online store with cheap goods, this amendment would be a big hindrance. Such initiatives discourage at all to start your own business. It does not support small business, which all trumpeted, and a spoke in the wheel,” she says.

The variation of the coefficients, the abolition of benefits for early retirement and other problems are solved since 2002 and is still not resolved, says head of the Centre for analysis of social programs and risks, HSE Sergey Smirnov. “The pension system is at an impasse and something I should be radical,” he concludes.

The labour Ministry has refused to comment. Also received the representative of the Secretariat first Deputy Prime Minister Igor Shuvalov.

The proposal was not discussed, said RBC representative of the Deputy Prime Minister Olga Golodets, who is responsible in the government for the social block. Press Secretary of the head of the government Natalia Timakova said that in the near future meetings on this topic is not assigned.

With the participation of Valeria Iacovou, Anna Mogilev and Olga Volkova