Pension system in modern Russia: reform after reform...

Abstract

As of late, Russia passed a number of laws that substantially affected the insti-tutional framework of the national pension system (corporatization of pension funds, retirement savings security system design, freezing of funded pensions). A very controversial law raising the retirement age was enacted in late 2018. Further, the Bank of Russia and the Ministry of Finance drafted a bill to establish a voluntary system of individual pension capital.The comparison of key demographic and pension indicators in Russia and in the Organi-zation for Economic Cooperation and Development (OECD) countries concluded that there are no compelling reasons for the recent raising of retirement age in Russia (especially for men). The claims of new retirement age supporters about excessive federal budget transfers to the mandato-ry pension insurance are questioned. Drawing on the previous experience of the national pension sector, an attempt is made to estimate whether the enacted laws will sustain the growth of per-sonal savings in voluntary pension schemes. Particularly, it is shown that the designed system of individual pension capital will only partially be able to replace mandatory retirement savings in the long money market in the coming years.