Russia: a package of pension laws is published

The package of pension laws is published on the Internet portal of legal information.

Federal laws on changing pension legislation, criminal liability for dismissing people of pre-retirement age, sending funds confiscated from corrupt officials to the Pension Fund, weekends for medical examination and ratifying the convention on pension replacement earnings standards.

The documents will enter into force on January 1, 2019, a number of items of the main pension law – January 1, 2025.

The basic Law

The main pension bill prepared by the government initially envisaged a gradual increase in the retirement age to 65 for men and 63 for women. However, Vladimir Putin proposed to soften a number of measures. In particular, he advocated retirement age for women at 60, early retirement for mothers with many children and the introduction of measures to protect people of pre-retirement age, including an increase in unemployment benefits for them and the introduction of responsibility for employers for dismissal before retirement.

The adopted law provides, starting from 2019, a gradual increase in the retirement age by five years – up to 65 for men and 60 for women. The length of service that gives the right to early retirement will be 42 years for men and 37 years for women.

The cumulative pension will be paid, as now, with 55 years for women and 60 for men. This includes both one-time payments for those with a cumulative pension of 5% or less of the total pension, and urgent payments. In addition, the right to continue to appoint a funded pension at the appropriate age is fixed.
An increase in unemployment benefits for persons of pre-retirement age is envisaged. A preferential mode of retirement for mothers with many children is introduced. Support measures are being established for rural retirees. Also saved tax incentives for land and real estate.

Fines for dismissal

The second law makes amendments to the Criminal Code providing for fines of up to 200 thousand rubles or 360 hours of forced labor for unjustified refusal to hire or for the dismissal of persons of pre-retirement age.

Such responsibility is introduced in connection with a change in the retirement age of citizens.

Refusal in employment or dismissal of a person of pre-retirement age will be punished with a fine of up to 200 thousand rubles, or in the amount of the convicted person’s income for a period of up to 18 months, or compulsory work for up to 360 hours.
Pre-retirement age – a period of time lasting up to five years before the appointment of a pension.

From corrupt officials to pensioners

Amendments to the Budget Code allow to send funds confiscated from corrupt officials to the budget of the Pension Fund. The document refers to the income of the fund from 2019 confiscated funds of bribe takers and money from the sale of property seized from them.
The pension fund will be able to use this money to pay pensions and solve the tasks that it faces in the light of the upcoming changes in pension legislation.

The Federal Treasury, at the request of the developers of the law, predicted the possible flow of such funds in the years 2019-2024 in the amount of 1.8 billion rubles.

Convention on the replacement of earnings by pension

The International Labor Organization Minimum Standards of Social Security Convention was adopted at the 35th session of the organization’s general conference on June 28, 1952 in Geneva. It has already been ratified by 55 states.

It suggests that the replacement rate for lost earnings of an old-age retirement pension should reach 40%.
The Convention covers all the main areas of social security, including medical care, sickness, unemployment, old age, in connection with an industrial accident and occupational disease, family security, maternity, disability, loss of the breadwinner.

At the same time, according to the Deputy Minister of Labor and Social Protection of Russia, Andrei Pudov, sections of unemployment and family support were withdrawn from ratification.

In accordance with the requirements of the convention to national mandatory pension insurance systems for employees, the Ministry of Labor and Labor developed a method for calculating the replacement rate of previous earnings for social security in old age, disability and on the occasion of the loss of the breadwinner.

Clinical examination

Another law assumes that employees who undergo medical examinations have the right to be released from work for one working day every three years while retaining their place of work and average earnings.

Employees of pre-retirement age and pensioners will be eligible for exemption for two working days once a year.

Now the standard retirement age in Russia is 60 and 55 years for men and women, respectively, the retirement age prescribed by law was established back in the 1930s. The question of raising the retirement age has been discussed for quite some time. The need for this is due to the increased life expectancy and the inability to provide a decent pension in an environment where the number of employees in the country decreases and the number of pensioners, on the contrary, grows. Today in most countries of the world the retirement age is 60−65 years.

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