Support The Moscow Times!

State Duma Backs Cut in Pension Savings

The State Duma approved pension reform that will cut mandatory savings without raising retirement ages, thereby ducking a tough decision on financing the budget burden of an aging population.

The parliament made one concession to Russia's nascent asset-management industry, retaining a higher levy for workers who opt to keep their retirement account with a private asset manager.

But critics, including business leaders, economists and pension fund managers, say the new rules will store up trouble for future budgets and slash future funds available for investment in financial markets.

Population has declined sharply since the collapse of the Soviet Union, and pensioners have formed an important part of the voting base of President Vladimir Putin.

The law, approved Friday, will reduce the contributions employers pay into mandatory retirement saving accounts on behalf of employees, from 6 percent of salary to 2 percent, beginning in 2014.

Under pressure to plug a huge hole in the budget of the State Pension Fund, Putin has backed the change.

Related articles:

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more