Finance Ministry preparing Plan B pension reform

The Ministry of Finance is promoting another pension reform aimed at unblocking the funded part of the pension system, which has remained frozen since 2014, Izvestia daily reports.

Natalia Seliverstova | RIAN
Natalia Seliverstova | RIAN

The State Duma is expected to consider a corresponding bill this year. Under the new system, referred to as Plan B, Russians will be able to make their own savings for old age in addition to the retirement benefits they will receive from the Pension Fund.

“People’s contributions to the funded part of their pensions are frozen every year by a federal law,” says tax expert Nikolai Yepikhin, director of the Uproshchyonka (‘simplified taxation system’) website. “This new pension system won’t cancel this policy. If the deputies in the lower house stop freezing that money, it will automatically return to the accounts, but without interest. So it’s too early to talk about unblocking funded pensions. Even if they do this, one needs to understand that inflation has already eaten up a good chunk of those savings.”

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