Aug 19, 2008: Proposal to guarantee retirees a pension-to-wages ratio of 30%

The Finance Ministry of the Russian Federation has recently introduced a proposal, initiated by the Vice Prime Minister and Finance Minister Alexei Kudrin, aimed at guaranteeing retirees an adequate pension and maintaining the ratio of pension-to-wages at a constant rate of 30 percent. The proposition, which is part of fiscal strategy until 2023, proposes to increase pensions by changing the way the Unified Social Tax is levied on employers and by collecting a tax from employees under the age of forty. If the motion is passed, citizens born after 1968 will pay 3 percent of their salaries into a personal pension fund. At the same time, the government will use the money that employers presently pay towards employees’ pensions to supplement the incomes of current pensioners.