Ministry: Russian Pension Fund has no money for new pension rise

GORKI, Moscow Region, Feb 18 (PRIME) -- Russia’s Pension Fund has no money to raise pensions again on April 1, although 2015 inflation will most probably exceed this year’s pension growth, Labor Minister Maxim Topilin told reporters Wednesday after a meeting with Prime Minister Dmitry Medvedev.

On February 1, pensions rose 11.4%. On Tuesday, the Economic Development Ministry said in its adjusted forecast that the 2015 inflation is likely to exceed the earlier estimate of 12.2%.

“Our mechanism works as the following: pensions are raised by inflation on February 1 and if incomes of the Pension Fund is higher than inflation, then there is mechanism for a rise from April 1 (of additional pensions’ growth). This year there are no legal grounds for this because inflation has topped Pension Fund incomes,” Topilin said.

But the ministry has opposed Finance Ministry’s idea of freezing salary growth for state employees this year, Topilin said.

The government has made no final decision on raising the retirement age, Topilin said.

“We have to compare it with life expectancy, to compare it with the age, with how long people live after retirement in our country and how long they live in other countries. This makes a proper analysis. Experts have joined these efforts very proactively,” Topilin said.

All ministries supported the plan to stop paying pensions to people who are still employed and earn 1 million rubles per year or more, starting from 2016-2017, Topilin said.

(62.8353 rubles – U.S. $1)

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