Select your city:
Moscow

VTB Bank call center

+7 (800) 200-77-99
+7 (495) 739-77-99
For general information and enquiries

MinLabour plans to call off public early pensions

 
06.06.2013

MinLabour is considering rolling back state financing for early pensions for new employees in hazardous industries from 2017-18. Such a step would push employers to create corporate pension schemes (which must be enough to pay early pensions before retirement age) and ease the pension fund deficit. If a company does not offer a corporate scheme, it would have to pay an additional contribution for each employee to the Social Insurance Fund, in which case employees would gain early payments only if they obtain occupational diseases.

According to MinLabour, in 2012, 31.8% of all those employed in Russia worked in hazardous industries. Besides, of the RUB 4.2tn paid by the State Pension Fund as retirement pensions, RUB 1.1tn (26%) was routed to early pensions. Meanwhile, corporates in hazardous industries must pay extra contributions to the State Pension Fund, depending on the level of adverse health effects of a job (from 2013 it was set at 2-4%, and from 2015 it is to be 6-9%).

MinLabour’s is debating its plan with labour unions.

MinLabour’s suggestion implies that the costs of early retirement are to be fully moved from the government towards employer within next several years, with the aim being to narrow the pension fund deficit. If implemented, this plan would de facto mean an increase in non-state pension fund money.

We suggest that this is a step in the right direction; however, we do not expect to see the final consolidated decision on pension system reform earlier than this autumn.

Maxim Oreshkin, Daria Isakova
VTB Capital analyst

Back to the list



VTB group news subscribe
  • E-mail subscribe
  • RSS lent
    Subscribe
    Subscribe
Download the list of cities.....