Russian Pension Fund Board meeting held in Moscow

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21 march 2018

An extended meeting of the Board of the Pension Fund of Russia (PFR) was held in Moscow today. It was attended by Minister of Labor and Social Protection Maxim Topilin, Chairman of the PFR Board Anton Drozdov, representatives of the Russian Federal Assembly and the Federation of Independent Trade Unions of Russia, managers of PFR divisions from all constituent entities of the Russian Federation, heads of structural subdivisions of the PFR Executive Directorate.

The key topics of the PFR Board meeting included the discussion of the PFR 2017 work results and identification of the priority tasks facing the Fund and the pension system in 2018. PFR Board Chairman Anton Drozdov delivered the keynote report.

Payment of pensions and benefits

2017

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 2107, the Pension Fund made the annual adjustment of insurance pensions for pensioners who kept working in 2016. Social pensions and other types of state pensions paid to working and non-working pensioners increased by 1.5% on April 1, 2017. Starting February 1, 2017, the monthly benefit received by the federal benefit holders was increased by 5.4%.

In January 2017, pensioners received a lump-sum payment of 5,000 rubles. 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.

2018

The assignment and payment of pensions, as well as social benefits through the PFR is held all over Russia in a timely and uninterrupted manner.

Starting January 1, 2018, insurance pensions (including a fixed payment) of non-working pensioners were increased by 3.7%, which exceeds the 2017 inflation rate. The size of the flat-rate benefit after the indexation is 4,982.9 rubles per month, the value of the pension point is 81.49 rubles (in 2017 - 78.58 rubles). The average annual size of the old-age insurance pension as a result increased to 14,137 rubles and the average annual size of the old-age insurance pension for non-working pensioners - up to 14,416 rubles.

On February 1, the monthly benefit for federal benefit holders was increased by 2.5%. The package of social services that is included in the monthly benefit was also increased by 2.5%. Now it stands at 1,075 rubles 19 kopecks per month.

State-provided pensions, including social ones, will be increased by 2.9% starting April 1 for working and non-working pensioners. In August 2018, the Pension Fund will make an adjustment of the insurance pensions of the pensioners who kept working in 2017.

Same as before, there are no pensioners in Russia with a monthly income smaller than the pensioner’s subsistence minimum in effect in the home region. All non-working pensioners receive a social supplement, which will increase their pensions to the pensioner’s subsistence minimum in the home region.

Starting 2018, Russia has a new type of pension: the social pension for children whose both parents are unknown. The new type of pension resulted from the fact that children of unknown parents, or foundlings were put into an unequal financial position compared to orphans. They had no right to receive the survivor (loss-of-breadwinner) pension because they never had a parent in the eyes of the law.

Another positive change includes the procedure for the renewal of pension indexation after a pensioner’s employment termination. During the years 2016 and 2017, pensions were raised and paid in full after three months since the date of a pensioner’s resignation. The procedure still takes three months in 2018 but a pensioner will be reimbursed.

Maternity capital

Over 10 years of the maternity capital program execution, the maternity capital size has been increased from 250 thousand to 453 thousand rubles. To date, 8.4 million Russian families have become the certificate holders. Almost 60% of them have already fully used the maternity capital funds.

Initially, the maternity capital funds could be spent the following three ways: families could improve their living conditions, pay for education of their children, form the mother’s funded pension. In 2016, a new way – procurement of goods and services assisting in the social adjustment and integration of children with disabilities was added. A number of significant additions have been made to the maternity capital program in 2018.

First of all, the second child born to families with a low income after January 1, 2018, will entitle those families to 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 also depend on the region; it will amount to the subsistence minimum established by the region. Families can spend this money on daily living needs. More than 2 thousand corresponding applications have been submitted since the beginning of the year.

Secondly, a three-year moratorium on the maternity capital use for pre-school education of children has been lifted. Over 4 thousand corresponding applications have been submitted since the beginning of the year.

Finally, the possibility of joining the maternity capital program has been extended through December 31, 2021.  This means that the child, who qualifies for the maternity capital certificate, should be born or adopted before that date, December 31, 2021. There are no deadlines for issuing the certificate or using the funds.

Co-funding social programs of regions

One of the key areas of the Pension Fund operation in terms of social security for senior citizens is co-financing of regional social programs.

In 2017, subsidies from the PFR budget for implementing social programs of the Russian federation constituent entities amounted to 1.04 billion rubles. The bulk of the funds – nearly 940 million rubles - went to upgrading of facilities of social service organizations: mainly for the construction, reconstruction and repair of social institutions.

In 2018, the Pension Fund will double efforts in this sphere: the PFR budget envisages a twofold increase in subsidies of the Fund for co-financing of social programs to 2 billion rubles.

Computer classes for non-working pensioners are worth noting individually. The project was launched in 2014. More than 117.1 thousand non-working pensioners attended computer literacy courses funded by the PFR subsidies. At least 60 constituent entities of the Russian Federation take part in the program every year. The total amount of funds allocated for the training of pensioners has reached nearly 215 million rubles, including PFR subsidies - 110.3 million rubles. In 2017, the PFR allocated 36.7 million rubles for these purposes, and the amount of funding provided in 2018 will reach some 35 million rubles.

2017 Transition Campaign

The Russian Pension Fund has summed up the results of the 2017 transition campaign to transfer citizens' pension savings to non-state pension funds (NPFs) and management companies (MCs).

In total, during the transition campaign of 2017, citizens submitted to the PFR 6.3 million applications for the selection of NPFs or CCs. The number of accepted applications was 4.9 million, which is 77.8% of the total number of applications under review, including:

  • 2.85 million people transferred their pension savings from PFR to NPF (58.2%);
  • 1.96 million people switched over from one NPF to another NPF (40.1%);
  • 76.7 thousand people returned from NPF to PFR (1.6%);
  • 4.9 thousand people chose a different management company (0.1%).

The Pension Fund will transfer the pension saving funds to non-state pension funds and management companies in accordance with the citizens’ choice within the timeframe established by the legislation by March 31, 2018.

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 significantly 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 not only on the Pension Fund’s website and the public services portal, but also in the mobile application for smartphones, which the PFR presented last year.

To date, more than 30 million citizens have used the PRF online services applying through the Personal Account on the PFR website and the public services portal.

FRPD and USSSIS

The Pension Fund continues to implement two federal projects: 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.