Pension Age Increase in the Russian Federation: Demographic Conditions and Macroeconomic Consequences

A. Solovyev
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A. Solovyev: State University of Finance at the Government of Russia, Moscow, Russia

Journal of the New Economic Association, 2015, vol. 27, issue 3, 190-199

Abstract: It is proved that the problem of "raising the retirement age" can not be regarded as an economic instrument to achieve a balanced budget of the state pension fund, in particular, and the whole of the pension system in Russia. Since the age of retirement in the pension system based on insurance principles depends primarily on the "external" factors for the pension system - mainly macroeconomic (volume and structure of GDP, inflation, payroll and distribution of income), as well as on the development and structure of the labor market (employment level and its structure). The main miscount of supporters of rendering automatically raising the retirement age on the basis of the linear dependence of the total increase in life expectancy, often even without gender differences, lies in the fact that in the insurance pension system, regardless of solidarity or a storage mechanism for the formation of pension rights, neither absolute necessity of implementing all the accumulated amount of pension rights for a reduced pension payment period, nor the increase of public pension liabilities for increasing the length of service prior to the raising of the retirement age are not taken into account. As a result of synergistic effect increase of the retirement age in pension insurance model leads after short and slight reduction of current expenditures on pensions to the subsequent exponential increase in public pension liabilities. Therefore, the only positive effect of raising the retirement age is to create conditions for a limited group of insured persons to increase the size of their pensions. Raising the retirement age is associated with the requirement to macroeconomic, social and labor conditions of the country in terms of creating additional jobs for young people and for the pre-retirement generations of insured persons. However, the external factors of the pension system, as shown by the Government approved the main directions of development planning and budgetary period 2016-2018, do not create the conditions for an adequate increase and are essentially limiters. The paper substantiates the economic mechanism of raising the retirement age on the basis of insurance principles formation of state pension liabilities.

Keywords: pension reform; pension age; number of pensioners; demographic loading on economy (search for similar items in EconPapers)
JEL-codes: E62 E69 (search for similar items in EconPapers)
Date: 2015
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