The Pension System of Russia: Features of Reform, Structure

Since January 2002, the reform of the social security system began. After numerous discussions, leading experts in this field, as well as representatives of the authorities, the main bills were approved and adopted. One of the key issues for the state is pension provision citizens. The moral state of society depends on it. In addition, the pension system reflects the economic situation of citizens. The issues of its functioning affect the financial condition of organizations and enterprises, the budget sphere, population incomes investments. Let us further consider what the pension system of the Russian Federation is today.

Relevance of the issue

The state pension system was created to protect citizens from crisis in the economy in unstable periods. This institute attracts additional funds through the resources available to enterprises and citizens. Due to state regulation, a clear system of interaction between citizens, subjects of the country and the authorities as a whole is being built.

Structure

The pension system of the Russian Federation includes three main elements:

1. The base part. It is formed by the payroll. 14% of the amount of remuneration comes first to the federal budget. From it, funds are transferred to the FIU. This amount is allocated to social benefits and the basic part of the pension. With a lack of funds in the FIU, the deficit is compensated by revenues from the federal budget.
2. Insurance part. It accounts for 11-14% of the salary fund. These funds go immediately to the FIU. System retirement insurance It is used for payments of shareware. Its value depends on the average salary in the country, payments of a citizen in the FIU and length of service.
3. Cumulative part. It accounts for 2-6% of the payroll funds. This amount is credited to the individual account of the worker. The amount of payments in the future will depend on the transfers of the employee and the income from investing in this part.

In addition, the employer or employee may make voluntary contributions to non-state funds. They will also be subsequently paid funds.

Structure Benefits

The three-level pension system allows you to change the distribution structure of contributions. Thanks to greater differentiation, the interest of the population, especially with high and middle incomes, in the legalization of their salaries is growing. The prevalence of the insurance principle contributes to the sustainability of the entire pension system. By January 1, 2003, accumulations in the PFR amounted to about 40 billion rubles (0.37% of GDP). At the same time, 1.36 billion was received as a profit from the temporary placement of money in securities (government) securities. The return on these investments was about 8%. With inflation above 15% in 2002, this figure means a reduction in the real value of pension savings.

Modern stage

At present, the transition from the distribution to the accumulative-distribution structure of pension provision continues. The population can independently choose a fund to which they will make contributions. The implementation of this stage is carried out through a number of measures:

1. Formation of the regulatory framework in accordance with which a three-level pension system operates.
2. The creation of a public council for investing savings.
3. Holding contests for the selection of a special depository and management companies.
4. The conclusion of agreements between the FIU and service organizations on the management of the funded part.
5. By sending letters to the population about the amount of available funds in individual accounts and application forms for the choice of management companies.
6. Signing of agreements on certification of signatures between several banking organizations and the FIU.

The legislative framework

The provisions of normative legal acts formulate the main provisions in accordance with which the pension system is being reformed. The purpose of the legislation is to consolidate the direction of changes and create conditions for the formation of a three-level system. Its elements complement each other, creating financial stability in old age, in case of loss of a breadwinner, in case of disability.

Basic principles

The pension system is based on:

1. Multistructure.
2. Universality and warranties of a basic level.
3. Differentiation of norms and conditions of support.
4. Differentiation of powers of the supreme authority and administration of subjects.
5. State regulation.
6. Financial sustainability.
7. Social partnership.

Main elements

The legislation establishes pensions:

1. According to the age.
2. For the length of service.
3. By the loss of the breadwinner.
4. Social pension.
5. By disability.

The pension system provides for mandatory and additional security.

Formation Features

The establishment of basic pensions is based on a living wage. Their value is the same for everyone. These payments are designed to minimize the provision of pensioners and eliminate their poverty. As a source of financing are funds from the federal budget. In addition to the base set compulsory pension insurance. These payments are differentiated depending on the citizen's contribution to the structure. Compulsory pension insurance is subject to all citizens who are engaged in labor activities and receive income.