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Friday, October 21, 2016

Pre-election compromise: the second indexation of pensions proposed to replace a one-time payment

The government is discussing a second indexation of pensions a one-time payment directly from the budget, “Vedomosti”. The final decision should be taken by President Vladimir Putin or Prime Minister Dmitry Medvedev.

photo: Gennady Cherkasov

According to the newspaper Vedomosti, citing two Federal officials in the government understand that the indexation of pensions before the elections is needed, but can’t ignore the fact that it will inflate the database and fully razbalansirovat the whole system.

Is a compromise — one-off payments to pensioners, which is less expensive, because they are produced directly from the budget, not the transfer through the Pension Fund of Russia. As expected, the decision on this matter will be made before the end of August.

One of interlocutors of the edition told that the Prime Minister of Russia Dmitry Medvedev earlier instructed the labor Ministry to find the money for indexation to pensioners by 8.56% from 1 September. The total cost amounted to 137 billion rubles. Another source of “Vedomosti” noted that the spending budget will be small if the indexing affects only the autumn and months.

An official from the office of the government explained to the publication that a one-time compensation is possible if it will be money. “To seek these additional sources of funding will be the Ministry of Finance, and there is no hurry to do it — no money, say” — he said.

A spokesman for Prime Minister Natalia Timakova said that next week’s meeting Medvedev on this issue is not scheduled. According to her, the government promised to make a decision after analyzing the data on budget execution for the first half.

Under the current legislation, pensions in Russia are indexed from 1 February the level of inflation of the previous year. However, in 2016 the pension for pensioners in Russia have been indexed 4%, with actual inflation at 12.9%).

In June, Dmitry Medvedev said that the restriction of indexation of pensions is “a temporary measure”. He noted that he considers it possible to return to the issue of the indexation of pensions to inflation next year.


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