Russian President Putin proposed returning indexation of pensions to working pensioners
Russian President Vladimir Putin has decided to return indexation of pensions to working pensioners. He came up with this initiative during the St. Petersburg International Economic Forum (SPIEF).
Pensions will increase and for those who continue to work, this will be truly fair
The head of state ordered the adoption of a bill on the annual increase in pensions for working pensioners from February 1, 2025. According to Putin, there are resources for this.
Putin notedthat this issue has been discussed for several years and was constantly raised by various political forces, including factions of the State Duma. At the same time, the head of state admitted that indexation is associated with additional budget expenses, but added that there is currently a shortage of workers in the country, and highly qualified specialists who are needed by the economy are retiring.
Pension indexation was suspended in 2016
By presidential decree, indexation of the fixed part of pensions for working pensioners was suspended in 2016. Working pensioners are those who receive a pension and work in accordance with an employment and civil law contract, while the employer makes contributions to the SFR.
Today payments to working pensioners increase thanks to accumulated pension points from employer contributions for the previous year. Every year on August 1, the Social Fund of Russia makes an automatic recalculation of the insurance part without applications from the pensioner, and the annual maximum increase cannot exceed three pension coefficients.
When work ends, the value of the pension coefficient increases and the fixed part of the pension is indexed.
The government announced a noticeable increase in pensions for Russians
In April, Russian Prime Minister Mikhail Mishustin said that at the end of 2023, insurance pensions of Russians increased by a total of 15 percent compared to 2022.
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The increase became possible due to planned and previously carried out additional indexation. Similar dynamics will be observed in the country this year, Mishustin assured. “Pensions, payments and benefits have been indexed,” he summed up during his speech in the State Duma.
Mishustin added that in 2023, the minimum wage also showed a noticeable increase. Over 12 months, the figure increased by a total of 18 percent. Such rates, the prime minister explained, ultimately outpaced inflation in the country.
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