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Regular version of the site

Regular academic workshop “Active Ageing Policy and Pension Reforms: Russian and International Experience”

 

The Institute for Social Policy (ISP) at the National Research University – Higher School of Economics is hosting since 2019 a regular academic workshop “Active Ageing Policy and Pension Reforms: Russian and International Experience”

The workshop is to encourage academic and expert discussion on social policy development, aging population, active ageing, and pension reforms that are to be based on research and international experience.

The workshop favours an interdisciplinary approach and expects to bring together Russian and foreign experts in different fields such as economy, law, sociology, demography as well as decision-makers dealing with these issues. 

The workshop is to focus on three key topics:

(1) social and economic dimensions of aging population and active ageing;

(2) pension reform;

(3) social insurance and its improvement options.

 

Academic Leader – Oksana Sinyavskaya, Deputy Director of the Institute for Social Policy.

Project Coordinator – Olga Voron, Advisor to the Director of the Institute for Social Policy.


 

On April 25, 2019, the Institute for Social Policy at the National Research University Higher School of Economics held the third academic workshop devoted to searching the equilibrium between pension policy and ageing society organized in cooperation with the World Bank within the series of events under the topic “Active Ageing Policy and Pension Reforms: Russian and International Experience”.

Many countries in the world are facing the challenge of being able to provide their citizens with an adequate income in retirement. Demographic changes, volatile macroeconomic conditions, new technological revolution and evolving nature of jobs market are affecting how the people will be protected from the poverty in the future and whether they will be able to enjoy decent living standards and economic independence while ageing. The Russian Federation, who adopted a retirement age increase and a set of employment support policies last year stands among other countries, who are trying to keep the sustainability and adequacy of their pension systems. A workshop will investigate the policy experience of Scandinavian countries and Baltic States in this area.

Speakers:

Ole Beier Sørensen, Ph.D., Senior Partner at Beier Research (Denmark) - The politics of age: Policy responses to increasing longevity - and their dilemmas and trade offs 01 Sorensen April 25 2019 ENGL (PDF, 731 Kb) 

 

Longevity is increasing, fertility is decreasing, real interest rates are low, growth is sluggish and dependency ratios threaten to weigh down economies. The solitaire leaves us with four options – work longer, save more, accept lower pensions or pass substantial financial burdens to our children, grandchildren and their descendants. The latter policy – robbing the nursery and undermining the welfare of future generations - is hardly a sustainable option for the longer term. Therefore, the main message of a responsible policy strategy is simple and runs: “When we live longer, we need to work longer!”

Russia is not alone in having to face these difficulties. In his presentation the speaker will provide an overview of policies adopted in other countries, how they combine sticks, carrots and solidarity measures, and he will comment on some of the outcomes. He will then look more closely at a few country examples – among other his own country Denmark where the pension age is linked to longevity and is now on a rapid upward hike. This exercise will illustrate the great importance of non-pension policies and the great responsibility of the social partners and of local industrial relations in supporting and facilitating longer work lives.

Longevity is increasing, and generally we are adding healthy years to our lives. However, this does not apply for all. In fact, driven by differences in cultures, life-styles, habits, living conditions, working conditions, access to health care…. socio-economic disparities in this respect are increasing. This development raises new policy challenges to be addressed. Some EU countries are facing resistance to pension age policies and a call to return to old policies allowing widespread early retirement. However, returning to failed policies of the past is hardly a recommendable strategy. So therefore, the question remains: What does an appropriate and balanced response look like, and what lessons can Russia draw from its European peers?

Olga Rajevska, PhD, Researcher, Scientific Institute of Economics and Management, University of Latvia (Latvia) - Reforming the retirement age in the Baltic States  02 Rajevskaya April 25 2019 ENGL (PDF, 1.14 Mb) 

 

As contrasted with the situation in Russia, the old dependency ratio in the Baltic States was relatively high at the beginning of the 1990s already, and the need to raise the statutory retirement age to maintain the sustainability of pension systems was supported by a broad consensus of political forces. The demographic burden exacerbated due to both negative natural increase, and permanent negative net migration, particularly among the working-age population. The speedy adoption of laws to raise the retirement age was facilitated also by painful structural changes in the economy, reducing employment rates, and the economical crises in the 1990s and in this century.

Raising the retirement age in the Baltic countries took place in two waves. The first wave began in the mid-1990s and was part of fundamental pension reforms. Initially, Estonia and Lithuania planned to maintain a higher retirement age for men, while Latvia immediately aimed at an equal age for both sexes. This wave lasted about 10 years and was accomplished reaching the benchmark of 62-63 years of age. The second (ongoing) wave was announced as a part of austerity package in the aftermath of the crisis in 2010-2011. It will be completed by 2025–2026 when the statutory retirement age reaches 65 years for both sexes. Estonia is considering the possibility of linking the retirement age to the average life expectancy.

The possibility of early retirement was offered as the main mitigating measure; there are no special legislative measures for the protecting people in pre-retirement age. In recent years, largely with the financing from European structural funds, the state has been implementing projects in the field of life-long education and is trying to reverse the prejudices of employers regarding older workers.

Moderator:

Oksana Sinyavskaya, Deputy Director, Institute for Social Policy, Higher School of Economics

Discussion participants:

Zoran Anušić, Senior Economist, World Bank

Anton Tabakh, Chief Analyst, Expert-RA Agency, Associate Professor, Higher School of Economics

Dmitri Pomazkin, Actuary, Private Pension Fund Gazprombank-fond, leading expert, Institute for Social Policy, Higher School of Economics  05 Pomazkin April 25 2019 RUS (PDF, 703 Kb) 



 


On March 21, 2019, the Institute for Social Policy at the National Research University Higher School of Economics  held the second academic workshop devoted to the Future of the Pension Savings in Russia and in the World organized in cooperation with the World Bank within the series of events under the topic “Active Ageing Policy and Pension Reforms: Russian and International Experience”.

Over the past three decades, the attitude towards the funded principles of pensions financing has changed in the world and in Russia. It evolved from their idealization and perception as the only panacea for the aging population in the 1980s - 1990s to complete disappointment in their effectiveness and, as a result the crisis of 2008-2009, the cancellation of already initiated pension reforms, which introduced compulsory pension savings. It is clear now that, although the pension savings are also subject to the negative effects of aging, and do not serve as a tool for reducing informal employment or expanding pension coverage, they occupy an important place in the pension systems of many developed and developing countries where they complement the state pension schemes based on distributional financing principles. One of the relatively new approaches to organization of voluntary pension savings, which aims to expand the coverage of such programs, is the principle of auto-subscription or automatic registration. In line with this approach in Russia, the Central Bank of Russia and the Ministry of Finance are developing the concept of individual pension capital.

Our second workshop in the series of events under the topic “Active Ageing Policy and Pension Reforms: Russian and International Experience” will discuss the role of pension savings in the contemporary pension systems with the focus on demographic and economic challenges, as well as the lessons, which the developing countries can learn from the countries that already apply the principles of auto-subscription in their voluntary funded pension schemes.

Speakers:

SERGEY BELYAKOV, President, Association of private pension funds (ANPF)  01 Belyakov_RUS_21-03-2019.pdf

Russian pension system framework and trends in socio-economic development

According to the Russian Federal State Statistic Service (Rosstat) data, the life expectancy in the Russian Federation can reach 73.25 years for males and 80.78 for females by 2035. At the same time, there is a continuing trend towards population aging, and the demographic dependency ratio is constantly growing. Decreasing the number of employees and growing the number of pensioners are of a global trend. The federal budget expenditures transferred to the Pension Fund of the Russian Federation annually increased are of 3.3 trillion rubles now, which correspond to 20% of the total federal budget expenditures, and will keep increasing according to experts’ estimates. To maintain pensions at the current level with their adjustments only by the inflation rate over the period 2024-2026 will require to increase the transfer from the federal budget to the Pension Fund of the Russian Federation of at least 5 trillion rubles. Under the population’s disposable income falling steadily down, the current pension system while trying to attempt 40% replacement rate will continue to generate poverty and a permanent shortage of insurance contributions to pay insurance pensions diverting federal budget resources in case the funded component of the pension scheme will not be reintroduced.

Dr. HEINZ RUDOLPH, Lead Financial Sector Economist, World Bank  2 Rudolf_EN_V2_21-03-2019.pdf

Pension Funds with Automatic Enrollment Schemes: Lessons for Emerging Economies

The presentation will cover main findings from the recently published research paper “Pension Funds with Automatic Enrollment Schemes : Lessons for Emerging Economies”. Since the introduction of the KiwiSaver scheme in New Zealand in 2006, several countries have implemented, or are in the process of implementing, voluntary funded pension systems with automatic enrollment features. Since most of the literature has focused on countries with the common law tradition, including the United Kingdom and the United States, this paper analyzes cases of countries with the civil code tradition, including Turkey, Poland, Chile, Brazil, and the Province of Quebec in Canada. This sample includes mostly emerging economies, with reforms at different stages. Although they are not a substitute for necessary parametric reforms, automatic enrollment schemes offer the possibility of improvements in future retirement income for a significant part of the labor force. The perspectives of the Russia Federation will be analyzed and based on these country experiences. This note stresses that the paternalistic approach of automatic enrollment schemes imposes a great degree of responsibility on governments and requires careful consideration of the design of the system, including the industrial organization of the pension fund industry and default investment strategies. Sufficient time and resources for preparing communication and educational campaigns has played a key role in achieving high rates of participation. 

Moderator:

OKSANA SINYAVSKAYADeputy Director, Institute for Social Policy, Higher School of Economics

Discussion participants:

EVGENIY YAKUSHEV, Executive director JSC NPF Safmar  04 Yakushev_RUS_21-03-2019.pdf

YURI VORONIN, Center Director, Center for Legal Support of Social and Economic Reforms, Institute of Legislation and Comparative Law under the Government of the Russian Federation

 

 


On February 28, 2019, the Institute for Social Policy at the National Research University – Higher School of Economics hosted the first edition focusing on social insurance development of the regular academic workshop “Active Ageing Policy and Pension Reforms: Russian and International Experience”.

The fate of Russian obligatory social insurance system is the permanent topic of the heated expert discussions and the object of various reforms. The most important aspects are pensionary insurance and obligatory health insurance. Nevertheless, no satisfactory result was reached in the improvement of insurant persons (which in one way or the other include the whole population of the country). The new changes that under discussion now are of a superficial character and, if we can judge by the knowledge accumulated over the last decades, will bring at best only short-term positive effect.

According to the report commissioned by the Center for Strategic Research, the obligatory social insurance system in Russia needs radical institutional (not fiscal or parametric) changes. The changes should reimagine the role of government and private agencies in the field of insurance. It is obvious that such changes need several years of preparation and discussion, both expert and public. That is the only way to make these changes socially, economically and politically effective.

The seminar heard the authors of the Obligatory Social Insurance: Ways to Reformation report

 

Evgeny Gontmakher, Coordinating Board Member, European Dialogue Expert Group, and Professor, Higher School of Economics

Obligatory Social Insurance System in Russia: From the Imitation To a Real Institution

There were many attempts to reform the social insurance system in Russian created in the early 1990s, but it is still one of the channels of budget, not insurance financing of social policy. The only way to turn this system into an effective institute is via its denationalization and its active involvement into the functioning of all subjects of the social life of the country. 

  

Alexander Safonov, Vice Rector of Academy of Labor and Social Relations

Reform of Social Insurance System: Main Macroeconomic and Institutional Challenges and Real Answers

The main problem with the reforms of social insurance in Russia is the lack on consistency, which could allow making decisions that take into consideration the most important factors influencing stability and sustainability of obligatory social insurance in middle- and long-term perspective. The majority of the fundamental innovations in the obligatory social policy were introduced with limited analysis of the country’s socio-economic development distinctions. They were based on the mechanical transfer of some other countries’ national cases. Those countries had different economic levels, different employment structures, and different sets of political and social institutes. That is why it is crucial to continue the discussion on the ways to develop obligatory social insurance. 

 

Yuri Voronin, Center Director, Center for Legal Support of Social and Economic Reforms, Institute of Legislation and Comparative Law under the Government of the Russian Federation

Concept Approaches to the Modernization of Compulsory Social Insurance in the Postindustrial Society

Today the Russian society has to choose an optimal model of social welfare, which will become a foundation for the country’s social development in the long-term. To make a long-term decision on the architecture and the principles of the functioning system, we have to examine all pros and cons of the three potential approaches to the system building-up (insurance, savings, and budget) and all possible options of the combined application of all three.

Moderator:

 

Oksana Sinyavskaya, Deputy Director, Institute for Social Policy, Higher School of Economics

  Discussion participant:

          Valentin Roik, Chief Research Fellow, All-Russian Scientific Research Institute for Labor, Ministry of Labor and Social Protection of the Russian Federation

 

 

 


 

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