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Pension system principles

Since 2002 Russia has adopted the pension system including obligatory pension insurance, state pension support and non-state pension insurance.

In Russia all citizens of elderly age receive pensions independent of their seniority. The standard labour pension age is: 55 for women, 60 for men; social pension: 60 for women, 65 for men.

1. State social security

State social security is provided to the citizens, who for some reasons are not entitled to labour pension - I, II and III group disabled, including disabled from little up, disabled children, men of 65 and women of 60, who have not enough insurance length, etc.

The state social security pensions are also provided to compensate citizens' income lost due to cessation of their state federal civil service when they reach long service term; or to undo the harm to health caused during military service due to radiation or technogenic disasters in case of disability or loss of breadwinner and in a number of other cases.

The state social security is funded by the Federal budget of the Russian federation.

The Pension Fund of the Russian Federation pays state social security pensions to more than 3 000 000 people.

2. Obligatory pension insurance

Labour pensions are established and paid within the obligatory pension insurance (OPI).

Labour pension is a monthly cash payment aimed to compensate wage and other payments lost by the insured person due to disability caused by age or invalidity. This pension also compensates wage and other payments and benefits of breadwinner to disabled members of the insured person's family, lost due to death of those insured. The right to receive this pension is stipulated by the current legislation.

There are three kinds of OPI pensions:

  • old age labour pension
  • disability labour pension
  • survivor's labour pension

OPI is provided at the expense of insurance premiums paid by employers for their employees.

The most common kind of labour pension is old age labour pension. The necessary condition for the old age labour pension is not less than 5 years' insurance time. The standard old age labour pension age: for men - 60, for women - 55.

More than 40 000 000 people in Russia receive old age labour pensions.

The Russian Federation Pension Fund paid pensions for more than 4.1 trillion rubles in 2011, which is 0.5 trillion rubles more than in 2010. There were no problems in any Russian Federation subject.

3. Non-state (additional) pension security

It is additional pensions funded and paid by non-state pension funds (NSPF). In order to receive this pension a citizen should make an agreement with the non-state pension fund and during a certain period of time make voluntary contributions. Except for the citizen contributions could be made by the employers.

11 000 000 people have pension accumulations in non-state pension funds. During the past year the number of obligatory pension insurance clients of NSPFs increased almost by a quarter and constituted 15,3 % from the total number of Russians having accumulative pension portion.

118 non-state pension funds operated in the field of the obligatory pension insurance at the end of 2010.