Russian Pension Fund sums up preliminary results of 2017

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18 december 2017

An expanded meeting of the Russian Pension Fund’s Board is taking place in Moscow today. It involves Russian Labor and Social Protection Minister Maxim Topilin, PFR Board Chairman Anton Drozdov, representatives of the Russian Federal Assembly and the Russian Federation of Independent Trade Unions, managers of PFR offices from all constituent territories of Russia, and heads of structural units of the PFR Executive Directorate.

Key items on the agenda of the PFR Board’s meeting are preliminary results of the PFR activity in 2017 and the Fund’s priorities for 2018. PFR Board Chairman Anton Drozdov has delivered the principal report.

Payment of pensions and benefits

Insurance pensions of over 31 million non-working pensioners were increased by 5.8% in 2017 (the indexation amounted to 5.4% on February 1 plus 0.38% on April 1). In August, the Pension Fund made the annual adjustment of insurance pensions of over 11.8 million pensioners who kept working in 2016.

As a result, an annual old-age insurance pension of non-working pensioners stood at 13,800 rubles in 2017 (164.1% of the pensioner’s subsistence minimum).

Social pensions and other types of state pensions paid to working and non-working pensioners increased by 1.5% on April 1, 2017. The pension increase was enjoyed by 3.9 million pensioners.

As a result, an average annual social pension amounted to 8,800 rubles (104.1% of the pensioner’s subsistence minimum) in 2017. An average annual social pension of children with disabilities and persons with life-long disabilities of the first group amounted to 13,200 rubles.

There are no pensioners in Russia with a monthly income smaller than the pensioner’s subsistence minimum in effect in their home region. All non-working pensioners receive a social supplement, which increases their pensions to the pensioner’s subsistence minimum in effect in the home region. In 2017, the PFR was paying the federal social supplement to 3.9 million people.

Pensioners received a lump-sum payment of 5,000 rubles in January 2017. The payment was made to all pensioners residing in Russia without exception, both civilian, and military; a total of 43.7 million people. As much as 221.7 billion rubles were assigned for those purposes.

Starting February 1, 2017, the monthly benefit received by 15.6 million federal benefit holders was increased by 5.4%.

On the whole, the Pension Fund spent 8.1 trillion rubles on paying pensions and social benefits in 2017.

In the last days of December 2017, the Pension Fund will finance the payment of pensions and social benefits during the holiday season. Some pensioners will receive payments to their bank cards before the New Year. Russian Post will be delivering pensions and social benefits according to its regular schedule.

Insurance pensions of non-working pensioners will grow by 3.7% as early as on January 1, 2018, instead of February as before. The increased fixed payment will amount to monthly 4,982.9 rubles, and one pension point will reach 81.49 rubles. As a result, an average annual old-age insurance pension will grow to 14,075 rubles, as against 14,329 rubles for non-working pensioners.

State pensions, including social ones, will be raised by 4.1% on April 1. Once this happens, an average annual social pension will amount to 9,045 rubles. An average social pension of children with disabilities and persons with lifelong disabilities of the first group will reach 13,699 rubles.

The Pension Fund will adjust insurance pensions of pensioners who were working in 2017 in August 2018.

The monthly benefit of federal benefit holders will increase by 3.2% on February 1, 2018.

Maternity capital

Consistent with the program of state support to families with children, the Pension Fund issued almost 600,000 maternity capital certificates over the first ten months of 2017. On the whole, 8.5 million Russian families have applied for maternity capital certificates over more than a decade (over 8.2 million certificates were issued).

An improvement of the living conditions remains the most popular way of spending maternity capital funds; 91.1% of all applicants have chosen this option. Since the day the maternity capital program was launched, 5 million Russian families have used it to improve their living conditions, including 3.2 million families that used maternity capital to repay their mortgage loans either fully or partially. More than 1.8 million families improved their living conditions without loans.

In addition, the PFR received 482,000 applications for children’s education, 3,800 applications for adding maternity capital to the mother’s funded pension, and 115 applications for the social adjustment and integration of children with disabilities.

Fifty-eight percent of maternity capital holders have fully spent their maternity capital funds.

Maternity capital stood at 453,026 rubles in 2017. Almost 2 billion rubles worth of maternity capital funds have been paid to families since the day the program took effect.

The State Duma is processing legislation, which will modify the rules of issuing and using maternity capital funds in 2018, such as postpone the deadline for joining the maternity capital program through December 31, 2021, lift the three-year moratorium on spending maternity capital funds on pre-school education, and enable families with a low income, to which the second or next child is born in 2018-2021, to receive monthly payments from maternity capital funds.

The low income means that family earns less than 150% of the able-bodied population’s subsistence minimum in effect in their home region. The payment will amount to the children’s subsistence minimum established by the region for the second quarter of the previous year (should a family apply for the payment in 2018, the payment will amount to the children’s subsistence minimum as of the second quarter of 2017.)

Electronic services

The Pension Fund is actively at work to develop its electronic services. Functions of the personal account section of the PFR website expanded a lot in 2017 and covered practically every payment received from the PFR, such as pensions, monthly benefits, federal social pension supplements, the package of social services, maternity capital, etc., as well as provided information about every assigned social benefit.

PFR electronic services are available on the Pension Fund’s website, the public services portal, and the application for smart phones presented by the PFR in spring 2017. More than 24 million people have used PFR services online as of yet.

Against the backdrop of electronic services’ development, the Pension Fund has seen an increase in the number of online applications for the assignment of pensions. The share of Russians who used online services to apply for the assignment of a pension or a change of the pension delivery method stood at 63.1% across the country in 2017. The indicator topped 90% in some territories, such as the Republic of Karelia (96.3%), the Republic of Buryatia (95.5%), the Volgograd region (93.8%), and the Belgorod region (91.2%). As many as 5.25 million people have applied for the assignment of a pension or a change of the pension delivery method since the service was implemented.

Importantly, the Pension Fund began the trial run of its first virtual client service in the Republic of Buryatia in 2017. The virtual client service is the system of “PFR-citizen” interaction encouraging citizens to receive services without visiting Pension Fund client offices in person.

The virtual client service invited the PFR’s clients in Buryatia to receive services and consultations and request documents and certificates on the phone, via terminals, in the personal account section of the PFR website, and on the public services portal. There is also the SMS notification service. The chat bot in the Telegram messenger automatically responds to the most frequent questions regarding pension laws.

The share of PFR services provided in the electronic form will reach 70% by 2018 (it stood at 67% as of the end of the third quarter of 2017).

Co-funding social programs of regions

The PFR continued to subsidize budgets of Russia’s constituent territories in 2017 for the purpose of supporting regional social programs. Over 1 billion rubles have been provided as subsidies, including 983.7 million rubles for improving physical infrastructure of social facilities, 36.7 million rubles for teaching computer skills to non-working pensioners, and 31.0 million rubles for rendering targeted assistance to non-working pensioners affected by emergency situations and natural calamities.

Measures improving physical infrastructure of social facilities were implemented in 82 constituent territories of Russia within the framework of social programs. Social facilities were built in seven constituent territories and renovated in another four in 2017.

The Fund helped Russian constituent territories repair 162 nursing homes and day care centers.

Technological equipment and durable goods were procured for 72 social facilities.

As a result, the living conditions and care provided by social facilities to over 23,000 senior citizens and persons with disabilities were improved, and the capacity of those facilities was enlarged by more than 1,100 residents.

Social programs implemented in ten constituent territories resulted in the procurement of 45 vehicles for mobile teams of 45 social facilities.

Almost 32,000 non-working pensioners attended computer classes. Targeted assistance was provided to more than 3,400 non-working pensioners affected by emergency situations and natural calamities.

PFR budget funds assigned for co-funding regional social programs increased from 1 billion to 2 billion rubles in 2018.

FRPD and USSSIS

In 2017, the Pension Fund carried on two extensive federal projects, i.e. the Federal Register of Persons with Disabilities (FRPD) and the Unified State Social Security Information System (USSSIS). The launch of the FRPD and USSSIS projects makes it possible to keep record of the entire range of social benefits enjoyed by all categories of citizens who receive state social support from budgets of all levels. The projects increase the efficiency of social expenditures and awareness of citizens of their entitlement to social protection.

The Federal Register of Persons with Disabilities contains information about the assignment of a disability status, rehabilitation programs recommended by socio-medical assessment boards and fulfilled, as well as other social benefits of persons with disabilities. It helps avoid multiple and multidirectional document flow between government agencies and spares a person with disabilities the need to provide documents certifying one’s entitlement to services. Thanks to the FRPD, the government receives statistical data in a one-stop regime for analyzing programs of assistance to persons with disabilities by any parameter, such as the provision with technical means for rehabilitation or education services.

The FRPD was commissioned as an information system on January 1, 2017. The trial run of the personal account section and the FRPD mobile application began in late 2016. In 2017, a great deal was done to connect every agency, both suppliers and users of FRPD information, to the system, in particular, on the level of Russian constituent territories. The FRPD has accumulated over 125 million entries regarding persons with disabilities. It is planned in 2018 to expand the list of information suppliers and the scope of information submitted to the register, in addition to developing functions of the personal account section, which will be expanded with theme forums, and the integration between the FRPD and the USSSIS.

The USSSIS will accumulate and supply government agencies with up-to-date information about personified social protection of the Russian population. The fact that such information will be available in one source will give the authorities a full idea of social protection of every particular citizen and help them decide whether he or she needs a particular social service.

In 2017, the PFR finalized the development of the USSSIS platform, began its trial run, and reached the final stage of connecting government agencies, which supply and use the information, to the system. The full-scale operation of the USSSIS will begin in January 2018. In addition, a service providing information from the USSSIS to citizens will be launched in 2018.