10 june 2019
The Pension Fund of Russia takes part in the Russian national poverty reduction project. Anton Drozdov, PFR Board Chairman, told RIA Novosti about specific features of this line of business, changes in the non-budgetary fund status and current developments in maternity capital payment procedure.
Mr. Drozdov, you have repeatedly emphasized that better pension literacy is a priority task of the Fund, including “My Pension” project you had discussed earlier. What is the purpose of the project?
Under the project, we intend to provide people who have sufficient duration of employment but have not reached the pension age with full information about their pension entitlement should they choose to go on working and move along the same trajectory. On the one hand, this will promote their interest, and, on the other hand, they will have time to take some kind of actions. We plan to update this information every three years. Therefore, by the time of retirement, a person will know what pension he or she will have.
Pensions in Russia are based on a declaration procedure. Could it be abolished for some people or, perhaps, some day, for all of us?
Today, the Pension Fund database includes information on record of service, wages, including soviet record of service of most people. We had been gathering such information together with employers for a long period of time, but still large data amounts require digitization. Presently, we are closely cooperating with the Federal Archive Agency, as some people have come from other countries, some information is missing, etc.
Generally, the Fund’s services are proactive. What does it amount to?
The service is following an individual, and not vice versa. We inform a person about his or her entitlement to particular support services. In this regard, we have prepared and come up with a proposal that some services, such as monthly payment in cash and federal social fringe benefit, be gradually provided without requiring relevant applications. It is an important direction of our activities.
The Pension Fund takes part in the national poverty reduction project. What is your role?
In the first place, we provide assistance to regions in identification of people below the poverty line. Rosstat (Federal State Statistics Service) obtains data based on its investigations and brings to the notice of regional authorities the general number of the poor. Regions provide information on applicants for this or that kind of support.
As you know, presently, eight regions – Kabardino-Balkaria, Tatarstan, Maritime Territory, Ivanovo, Lipetsk, Nizhny Novgorod, Novgorod and Tomsk regions – have been implementing a pilot project aimed at the achievement by 2024 of the national social and economic development goals of real income increasing and twofold poverty reduction.
In this respect, the Pension Fund is actively developing in the pilot regions methods of identification of lower-income individuals based on the information in the Unified State Social Security Information System (USSSIS) and the Fund’s information systems. Together with the eight regions, we have been developing a USSSIS-based technology of automatic identification of the poor with the concentrated information on all social support services and entitled beneficiaries.
Our objective for 2019 is to test this model in the pilot regions and then extend it to all constituent territories of the Russian Federation. Virtually, we are a sort of data bank for regions and Ministry of Labor for the program implementation, and, naturally, assistance to Rosstat.
In May, the Pension Fund started to pay newly calculated pensions – above the minimum subsistence level. For how many people was pension recalculated? Were there any problems? Have all people entitled to fringe benefits received them?
Yes, they have. The point is that under the law signed on 1 April, compensation to pension and lump-sum payment in cash should be in addition to federal social fringe benefit. We have 4,000,000 recipients of the federal social fringe benefit, and 435,000 recipients of regional social fringe benefit. Together with the May pension, the Pension Fund recalculated and paid the difference, so about 4,500,000 Russians have had their pensions increased.
You said earlier that the Fund had been developing additional instruments for limiting maternity capital monetization. I understand that what is meant here is the reduction of the list of organizations the money may be channeled to. Will you give any details?
The relevant law was enacted in March 2019. The maternity capital may be spent for housing improvement, including repayment of relevant credits. The purpose of the law is to prevent fraud by leaving in the list of operators of such finds only those whose operation is regulated by the Central Bank, such as credit institutions and credit consumer cooperatives with at least three-year work experience, and “Dom.RF”.
Furthermore, the law also authorizes the Pension Fund to request information on quality of housing acquired using the maternity capital from municipal authorities, in order to preclude acquisition of unfit for living housing and fraudulent use of funds.
Do you plan to refine the law on maternity capital?
We are working on it together with the Ministry of Labor and Social Protection. As you know, last year, a decision was taken to allow spending maternity capital for preschool education. This idea has become very popular: the number of relevant applications increased by 40%. However, there is a limitation: such funds cannot be spent for private preschool education services. Now, the Pension Fund and Ministry of Labor try to include private preschool care and attendance service providers in the list of organizations to which maternity capital may be channeled.
Also, next year we plan maternity capital indexation by this year’s inflation rate. This issue will be included in preparing the law on the Fund’s budget for 2020-2022.
A novel of this year is the appearance of a new category, pre-pensioners. PFR has already presented the administrative regulations on public service of confirmation of this status. Do you have any information on the number of applicants?
We have recorded about 150,000 applications: 37,000 through personal accounts and about 109,000 via Pension Fund offices. Besides, the Fund is actively using IEIS (Interagency Electronic Interaction System) for interaction with other entities to provide pensioners with the benefits they are entitled to, for instance, with the tax service: we communicate a pre-pensioner’s data, and the tax service decides on the relevant tax benefits. We also intensively use IEIS for processing requests from individuals and organizations where pre-pensioners apply for any services.
A major item on the social agenda today is a status of non-budgetary social funds. The Ministry of Health and Federal Compulsory Medical Insurance Fund have already voiced their negative opinion of the idea of unification. Why change the Fund’s status? In your opinion, is there any use in uniting PFR, Social Insurance Fund and Compulsory Medical Insurance Fund?
The adjustment of the Funds’ status in itself is not connected with the unification. These are quite different stories. As for the Pension Fund, PFR regulations were adopted as far back as the 1990s. They are quite difficult to embrace, and, therefore, we need a separate normal law to show what the Pension Fund is, what functions and objectives it has, that is, to ‘reduce to a common denominator’ provisions that are scattered throughout different laws. Hence, the status adjustment as such is not related to unification. This is the first point.
The second point is the discussion on the social partners’ role in the Fund management and pension funds owner: the state or employers. Today, the law says that pensions are the government property, the Fund’s budget shall be adopted in the State Duma by a relevant law, and prior to that it shall be examined by the Russian Trilateral Commission (RTC) on Regulation of Social Relations with the participation of social partners.
In my opinion, the adjustment of the funds’ status is required and important for defining their role in the system.
As for the final PFR operation options, presently, all proposals have been forwarded to the government, and will be discussed by social partners as well.
Recently, president Putin has signed the law on personified record keeping which annulled the hard copy analog of personal insurance policy number (SNILS, green card). The Ministry of Labor also plans to abandon hard copy maternity capital certificates. Are all the Fund services prepared for such changes? Isn’t there a data breach threat?
Universal digitization makes it possible to do without tangible media. It is convenient and will promote e-services. The Pension Fund’s electronic system is protected and certified accordingly, so there's nothing to worry about.
As for maternity capital certificates, the current provision of law provides for two options: a hard copy or a digital analog, as actually the basis for maternity capital provision is the register data. For convenience, if you decide to apply to a multifunctional public and municipal services center, it will make no difference whether it is in electronic or hard copy format.
With SNILS, the situation is the same. Upon on-line registration in the pension system, an individual is assigned a personal insurance policy number. Earlier, SNILS card preparation and issue took time, while following the entry into legal force of the new law, this procedure is no longer required. Services are already provided to you, as your data have been recorded in the Fund system, while the card is a vanishing service. Therefore, the fact that all agencies are switching to e-services and communicate with us through IEIS makes life significantly easier.
Interviewer: Olga Kudryakova, source: “RIA Novosti”