'I will not have courage to look pensioners in the face'

Russian State Duma was discussing the inevitability of the pension reform for 4,5 hours

'I will not have courage to look pensioners in the face' Photo: duma.gov.ru

The parliamentary and public hearings to improve the legislation on pensions have finished in the Russian State Duma. Alexey Kudrin admitted that he 'will not have courage to look pensioners in the face' if they leave everything as it is, and that it was necessary to launch the reform 10 years ago. Vyacheslav Volodin inquired from each speaker, as if looking for excuses, whether there was any other way but to raise the retirement age. Gennady Zyuganov reminded the bankers how they were saved from sanctions by giving trillion rubles from the reserve fund, and Vladimir Zhirinovsky in the same tone shouted from the tribune about the huge costs for the bombing and reconstruction of Syria. Read more about how deputies and experts were looking for money for pensions to Russians for 4,5 hours in the report of Realnoe Vremya.

''The size of today's pensions satisfies no one''

Representatives of all regions of Russia, including chairmen and deputy heads of regional legislative assemblies, attended the State Duma hearings. At 12 o'clock, the meeting was opened by Chairman of the State Duma Vyacheslav Volodin. Stressing the importance of the issue, he noted that the room was not enough for everyone: the hall accommodates 450 people, but there came more than 600 people, only a third of them were deputies, the rest were experts, representatives of the civil society, regions and business. Representatives of all four factions of the State Duma voted for the holding of the hearings in the parliamentary-public format.

Vyacheslav Volodin, stressing the importance of the issue, noted that the room was not enough for everyone: the hall accommodates 450 people, but there came more than 600 people

The draft law on the improvement of the pension legislation already passed the first reading on July 19, the deadline for amendments to the second has been extended until September 24. The first to come to the tribune was the minister of labour and social protection of Russia to make a keynote speech. ''The main goal is to ensure the stable development of the pension system, both now and in the future,'' Maksim Topilin said. According to him, the key prerequisite for the reform is an increase in the size of pensions of non-working pensioners from next year by 1,000 rubles per month. The minister expects that the proposed amendments will allow for a progressive increase in pensions to 20,000 rubles within six years.

At the same time, increasing the rates of insurance premiums is not an option, the head of the ministry of labour believes, as ''the economy may go in the shadow''. He also does not consider the progressive social contributions a solution because in this case the Russians will have the right to an additional pension.

Increasing the rates of insurance premiums is not an option, the head of the ministry of labour believes, as ''the economy may go in the shadow''

''We will not have courage to look pensioners in the face''

The next speaker, Accounts Chamber Chairman Alexey Kudrin, said that he and his peers have already reached the retirement age. ''What comes to our mind? That the pension is low and absolutely unworthy of the normal life,'' he complained. ''The transition to a third of your salary is, of course, a big challenge and shock for any person. Maybe we didn't do enough for this?'' Kudrin reminded how in the '90s, when he worked in the government, pensions increased in real terms three times. However, after 2011, the standard of living of pensioners stagnated, and in recent years it has even decreased. At the same time, budget opportunities are limited. In addition, the speaker noted that in 2016 Russia did not conduct a full indexation of pensions and did not index pensions to working pensioners.

''In fact, we've reached the line. What to do? To increase taxes? We know what businesses think about this, they are also critical. Of course, we can look for other options. The situation is aggravated by the fact that the revenues of the Pension Fund and the capacity of the budget system to allocate additional funds are already not enough. We need a fresh approach to the situation, a new concept. I am surprised when they say: ''Let's not change the retirement age, leave it as it is now.'' Here, it seems to me, it is impossible to reconcile with it. Because we will not have courage to look pensioners in the face who have such pension from year to year. There will be no improvement,'' skeptically said Kudrin.

The main goal, according to the head of the joint venture, should be the pension ranging from 60% to 70% of the wage. Without raising the retirement age, it cannot be achieved: ''We should increase the duration of healthy life and help a person to live fully [and] longer within the framework of active longevity programmes. That's what we need to focus on.'' Here, the speaker noted how important the system of continuous education is, so that people can find work aged 40, 50, and 60, and vocational guidance should be already provided in kindergarten. ''The government and the president in part of their decrees offer a new model of life for the elderly,'' he stressed.

The main goal, according to the head of the joint venture, should be the pension ranging from 60% to 70% of the wage

When he finished his speech, Vyacheslav Volodin asked the question, ''could the government go other way, could it find a different solution to the issue of increasing pensions, improving the welfare of our citizens of the older generation, do we have such ways?''. Alexey Kudrin said that perhaps it was necessary to change the pace of the reforms, to make them ''softer'', as well as to consider the timing of the beginning of the changes: ''But it had to be done 10 years ago,'' he said. In response, Volodin proposed to create a working group following the hearings, which together with the relevant committees, representatives of factions and civil society will continue to work on the amendments ''to improve the quality of the bill''.

''By 2030, almost a third of the population of our country will be elderly people''

Chairman of the Committee on Labour, Social Policy and Veterans' Affairs Yaroslav Nilov believes that the hearings will be the impetus in making further amendments to the bill. He is sure that both supporters and opponents of the reform understand the possible risks: ''Our task, discussing this initiative comprehensively, is to understand how to qualitatively improve it for the second reading and how to minimize these risks.''

Chairman of the Federation of Independent Trade Unions of Russia Mikhail Shmakov noted that 90% of trade union members are against the bill adopted in the first reading. According to him, it is impossible ''to pull out of this big problem the retirement age, privileges of some category and other things, otherwise we will again have a patchwork quilt which won't work. Therefore, we believe that all this should be considered integrally.''

Mikhail Shmakov noted that 90% of trade union members are against the bill adopted in the first reading

HSE Rector Yaroslav Kuzminov estimated that if nothing is changed in the pension system, the number of people of retirement age by 2024 will grow by 2,6 million people, and ''by 2030, almost a third of the population of our country will be elderly people.'' The head of the university believes that an additional package of measures to support people of retirement age is needed:

''The main claim is that we did not start it earlier and did not warn those groups of the population who began to make their life plans and [plan] their salary and pension. We have now no opportunity for maneuver, for postponing,'' Yaroslav Kuzminov complained, answering the Volodin's question whether it is possible to postpone the reform and agreeing with Kudrin that ''we have reached the line''.

Chairman of the Public Chamber of Russia Valery Fadeev said that the proposal to raise women's retirement age to 63 years is ''over the top'' and noted that colleagues in the regions are also against it. He considers the schedule of raising the retirement age ''too fast'': ''Let's do it slower: a year in two. What's the hurry? The president said that we have five or seven years, the financial condition of the country is normal, we have time.''

Alexander Shokhin admitted that it is necessary to change the pension system, but ''we see a number of risks and shortcomings in the justification that the government has made''

''Pensioners are offered as a sacrifice!''

The leader of the Communist Party faction, Gennady Zyuganov, began with the quote from the last year's Putin's message that ''the country needs a breakthrough, a breakthrough to the quality of life of citizens'', with the destruction of poverty and the Russian economy in the top five world leaders. To do this, the budget needs at least 10 trillion rubles, said Zyuganov, and, according to him, the president did not mind, and Medvedev promised to find 8 trillion. But ''Mr. Siluanov showed the budget plan'', which has ''a reduction in the economy spendings by 17%, in the welfare spendings — about the same, and housing and communities — by almost a third.'' As for the bill on pensions, the head of the party called it ''the law on the backwardness of the state'' and ''the most cruel and cynical'' in the last 25 years:

''Who are the heroes and victims of the decisive breakthrough demanded by the president, and the nation agreed with him?! I believed that the president would gather billionaires and millionaires, oligarchs — they have accumulated 90% of the national wealth and increased their capital by $25 billion last year, and would tell them: ''My friends, we must share. Let's pay full-fledged taxes, as they pay in America, Germany or China.'' This did not follow — they are afraid to touch the sacred cow. I was sure that Medvedev would gather bankers and tell them: ''How come? When the country was shook in 2008, we gave you $200 billion from the reserve fund! You were saved.'' Also, the United Russia over the past three years added 4 trillion rubles! Let's make the decision, you promised that you will invest and create jobs, raise wages. We looked — it turns out that they invested less than 5% in investments from what they gave. [The rest of the amount] they stuffed in their pockets and in offshores!''

According to the leader of the Communist Party, with proper work we can find money for pensions to Russians. For example, if the law enforcement bodies ''deal with the thieves, who in the '90s flushed the country down the gutter'', ''sold factories, ships and everything else for three foreign-made cars.'' There was an option to return the ''offshorers'', but ''they were given two islands, now they hide their money as well as our Russian money — they will not pay taxes at all.'' The outflow of capital from Russia did not decrease, on the contrary, it doubled after the president's address. It is not clear what do we need so many officials? ''They are now twice more than in Soviet times — 6 million!'' said Zyuganov, adding that their spending rose to 1,3 trillion rubles. We need to invest in production, science and education: ''If there is a 3,5% rate, the picture will be totally different in the pension system as well!''

The leader of the Communist Party faction, Gennady Zyuganov, began with a quote from the last year's Putin's message

The chief communist called for urgent implementation of the president's address in terms of improving the quality of life of the population. ''I am appealing to the president: 77% voted for you. But 91% are against this reform.''

''How will they live longer if we make them work more?''

Rector of Ranepa Vladimir Mau came to the tribune, who was in solidarity with the colleague from the HSE and other experts: ''This decision is not just due, it is overdue.'' ''We should understand that the solution is complex,'' he said and added that sometimes it is necessary to make unpopular but important decisions.

The leader of LDPR party, Vladimir Zhirinovsky, said that no one calls the main reason for Russia's failure. ''Three days – no Russian Empire, three days – no Soviet Union. In three days we disintegrate the state — what pension when we have no state!''

''Why are we talking about pensioners? We're driving the middle generation to the grave! Men die mostly aged from 35 to 55. Why are you talking about pensioners? What 80 years?! If they live up to 80 years — it's very good, but how will they live? We say, ''let's extend the retirement age because people will live longer.'' How will they live longer if we make them work longer? I do not see logic here! People live longer if they rest! If they are in a sanatorium, at home. No, let's work as a serf, and you'll live longer. It never does!'' said Zhirinovsky.

The leader of LDPR party, Vladimir Zhirinovsky, said that no one calls the main reason for Russia's failure

Kudrin: ''The investment part of the pension should be preserved''

Chairman of the Committee on Health Protection Dmitry Morozov, whose committee is also a co-executor of the bill, recalled that life expectancy has increased to 73 years. ''We can not ignore the deepening of the demographic crisis and the reduction in the number of able-bodied citizens,'' he said and added that it is extremely important to ensure a decent amount of pensions. Morozov believes that the starting point for discussions should be that people wantsto live long, be healthy and active: ''The government needs to work out in detail a package of laws and regulations that ensure the right to work, modern education and healthcare.'' He also raised the issue of maintaining early pensions for healthcare workers.

Vyacheslav Volodin said that the created working group will be headed by his deputy Olga Timofeeva, she oversees social policy issues. First Deputy Chairman of the Committee on Education and Science Gennady Onishchenko said how important it is to consider the proposed amendments in the context of the tasks facing our society, especially those set by the president. He is sure that the role of science is very important in addressing these issues.

The final word was taken by Alexey Kudrin. According to him, a necessary element of increasing the reserve replacement rate of wages for pensioners is the investment part of the pension: ''I am in favour of its preserving — this is an important element of the future pension system.'' The head of the joint venture added that this part gave about 15% in addition to pension afetr the full length of service.

Maksim Topilin thanked the participants for a large number of constructive proposals

The results of the hearings were summed up by Minister of Labour and Social Protection Maxim Topilin. He thanked the participants for the large number of constructive proposals. He stressed that the draft law provides for a long transition period with an increase in the retirement age: for men — ten years, for women — sixteen years. Speaking about the investment part of pensions, he noted that contributions should be voluntary. ''If we talk about a voluntary system, and not the one that was, perhaps, a completely different field for development is revealed,'' concluded Topilin.

By Vasilya Shirshova. Photo: duma.gov.ru
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