Based on the Regulation of the RF Government dated December 25, 2012 No.2524-р Strategy of the Long-Term Development of the Pension System of the Russian Federation was approved.

The Strategy defines areas and tasks to implement in Russia the pension system that will be adequate to the country’s economic development and comply with international standards. Main objective of the pension system development is to guarantee the socially acceptable level of the pension coverage and a long-term financial stability of the pension system.

“The Strategy implementation will help to prevent falling level of wages replacement with the pension and thus will provide to citizens a decent pension coverage on principle of social justice”, - said Maxim Topilin.

“Besides an understandable and transparent pension system will give the citizens an opportunity to choose the most acceptable pensions strategy through their participation in corporate and private pension systems”, - he added.

Tasks of the pension system:

• To provide for the factor of the old-age labor pensions replacement of up to 40% with the standard pensionable service and average wages, achievement of the acceptable pension level for the middle class through participation in corporate and private pension systems;
• To maintain the acceptable level of the insurance load for employers with common rates of insurance fees for all categories of employers;
• To provide for a balance of the formed pension rights with the sources of their financing;
• To improve efficiency of the saving part of the pension system.

The pension system will be based on the three-tier model:

• Tier 1 – labor pension (state pension) as part of the state (public) system for mandatory pension insurance formed from insurance fees and inter-budgetary transfers from the federal budget in cases set forth by the applicable law;
• Tier 2 – corporate pension formed by the employer with possible engagement of the employee on the basis of labor and (or) collective contracts or industrial tariff agreement;
• Tier 3 – private pension formed by an employee (individual).

The document was developed by the Ministry of Labor and Social Protection of Russia with involvement of the Ministry of Economy, Ministry of Finance of Russia and other ministries, representatives of scientific and educational community, non-state pension funds, insurers, etc.

A wide public and expert discussion of the Strategy draft took place. Main issues that were touched upon in the course of the discussion included reforming of the institution of early pensions and upgrading of the saving component part of the pension system. Besides particular attention was paid to the discussion of issues connected with changing of the terms for generation and exercise of pension rights of citizens.

Based on the results of the public and expert discussion of the Strategy the following adjustments were made:

• A requirement on standard duration of the length of service required to calculate the labor pension was reduced from 40 to 35 years;
• Dynamics of the growth of rates for self-employed citizens was reduced;
• A stage-wise transformation of the cumulative component part was provided allowing for optimization for insured persons effective of January 1, 2014 of the rate of insurance fees for the cumulative component part of the pension system of up to 2%, and transfer of 4% to the distribution component part, etc.

The Strategy will be implemented by the Russian Federation Government by stages.

Currently for the purpose of implementation of measures set forth by the Strategy Federal laws dated December 3, 2012 No. 243-FZ “On making amendments to certain legislative acts of the Russian Federation on issues of mandatory pension insurance” and No. 242-FZ “On making amendments to certain legislative acts of the Russian Federation on issues of payments from the pension accumulated funds” were adopted.

These Federal laws provide for:

• Additional rates for insurance fees to finance the insurance part of the labor pension for certain categories of the insured in respect of the insured persons employed at jobs with special labor conditions (Lists 1 and 2),
• A fixed amount of insurance fees for mandatory pension insurance for self-employed persons, self-employed additional preferences regarding insurance fees payment,
• Optimization for the insured persons effective of January 1, 2014 of the insurance fee rates for the cumulative component part of the pension system,
• Expansion of the list of financial instruments for investment of the pension accruals funds to provide for returns on investments and to safeguard the pension accrual funds.

In 2013 draft federal laws will be developed to improve procedures for creating the pension rights in the distribution component part of the pension system (a new pension formula), to create a mechanism of incentives for people that expressed their intention to continue working upon achievement of the pension age and that took a decision to delay an admission to pension, to improve mechanisms of prorating of the notional pension capital and labor pension amounts, and create a mechanism of pension payment to working pensioners based on the payroll rate, as well as to introduce a special evaluation of the labor conditions based on the results of which employers will be exempt from payment of insurance fees to the Pension Fund of the Russian Federation at additional rates.

At further stages of the Strategy implementation (from 2014 to 2017) the Russian Federation Government will take measures to specify the legal status of the Pension Fund of the Russian Federation, to improve the system of personalized registration of citizens granting to self-employed citizens the right to choose an option of formation and exercise of pension rights, to improve the form of incorporation of non-state pension funds, to adjust the insurance fee rates for insurers in respect of the insured persons performing jobs under special working conditions.