Pensions for the self-employed: Russian Pension Fund threatens contribution defaulters, while those prefer stashing money under the mattress
Only a handful appreciated the initiative of the Central Bank and the Ministry of Finance on voluntary pension savings
The Ministry of Finance and the Central Bank reported on 30 October than the self-employed would also be able to participate in the presented new scheme of pension savings (guaranteed pension plan, GPP). The specifics of tax concessions for this category of citizens will be discussed separately. But, as Realnoe Vremya was explained in the Tatarstan office in the Pension Fund of Russia (PFR), the periods when self-employed individuals pay contributions for compulsory pension insurance will be counted as work experience. If there is no contribution (consequently, no service), there is a probability that there wont be enough years of service to retire.
The self-employed are offered to save money for pension
On 29 October, the Ministry of Finance and the Central Bank presented a new scheme of voluntary pension savings — a guaranteed pension plan (GPP). On 30 October, Anton Siluanov's ministry clarified that not only wage labourers but also self-employed individuals could participate in the programme. The details of tax concessions for the latter will be created separately soon.
“The bill doesn't envisage a ban on the self-employed from participating in the GPP,” RBK cites the press service of the Ministry of Finance of Russia.
The potential coverage of the new system, according to the Ministry of Finances data, is 72,5 million wage labourers and self-employed people. The bill on GPP hasn't had so far any other details about income taxpayers.
At the same time, Vice Minister of Finance Aleksey Moiseyev claimed during the presentation of the new scheme that even a person who had never worked could participate in it: The spouse or a relative can pay the contributions for him.
“Younger self-employed people are more active, they often that there are other, more effective ways to accumulate money”
“We have singled out two points of views. Younger self-employed people are more active, they often that there are other, more effective ways to accumulate money than pension contributions. Older people are by far more interested in the possibility of signing voluntary relationships with the Pension Fund,” Pakharyova noted.
Tatarstan self-employed individuals confirmed this opinion in a talk with Realnoe Vremya.
“It is my point of view, but it seems to me that if one should transfer money somewhere, it is certainly not the Pension Fund. Another variant of investments should be chosen. I don't think about the pension at all now, not to mention pension savings. I have 30 years ahead,” self-employed founder of pyranic painting studio from Yelabuga 34-year-old Nadezhda Khidiryan thinks.
The self-employed without contributions to the PFR might not have enough service record to retire
At this moment, until all novelties are introduced, all citizens including self-employed have a chance to sign a voluntary agreement with the PFR, make transfers and receive a pension on equal terms, the Centre for Support for the Self-Employed reminded.
While the Tatarstan office of the PFR warned that if the self-employed didn't pay pension contributions, they might not have enough service when they retired:
The period of contributions paid by self-employed citizens to compulsory pension insurance will be counted as service record and considered when the pension is fixed, Realnoe Vremya was explained the current conditions to receive a pension in the press service of the regional office of the Pension Fund of Russia in Tatarstan. If the self-employed individual doesn't make the contribution, these periods of service won't be counted when fixing the pension, and it is likely there won't be enough service record that's needed to retire.
10 years of insurance (work) service and 16,2 pension points are the conditions to have the insurance pension fixed in 2019. By 2025, the conditions to receive a pension will become 15 years of insurance service and 30 points.
40,000 self-employed in Tatarstan already
According to the latest data, the number of self-employed in Tatarstan has reached 40,000 people. As Tatar-inform news agency said on 30 October in the Ministry of Economy of the republic, most of them work in taxi, lease a flat, work as consultants and tutors. Some provide services in programming, marketing and advertising. Moreover, 3,600 citizens from other regions who work on the territory of Tatarstan also registered as self-employed apart from the Tatarstan residents.
In Russia in general, according to the Ministry of Finances data, over 240,000 people have registered as self-employed individuals. The experiment is done in four regions: Tatarstan, Moscow, Moscow and Kaluga Oblasts. But it can spread to another 13 donor regions from the next year. Within the pilot project, instead of 13% income tax citizens earning an additional income pay 4% for services provided to natural persons and 6% to juridical persons. They make contributions to the Pension Fund only on a voluntary basis.
The bill of the Ministry of Finance assumes that self-employed workers will choose themselves how much money they should transfer as voluntary pension savings. It can be the full salary or 1%, the authors stressed.
Moreover, the participants of GPP are promised a concession for contributions up to 6% — liberation of income tax. The project Guaranteed Pension Plan will be launched approximately in the middle of 2021.