Russian Salaries Grew More than Pensions in 2020

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According to the report of the department on the execution of the budget of the Russian Pension Fund, the coefficient of salary replacement with an insurance pension in the Russian Federation has fallen by the end of 2020, Kommersant reported.

According to the Accounting Chamber, this percentage was only 29.4% last year, compared to 29.6% in 2019 and 30% in 2018. At the end of 2020, the average wage was 51 thousand rubles, while the average insurance pension was 15 thousand rubles.

At the end of 2020, there were 10 million retirees whose pensions met the International Labor Organization’s guidelines (at least 40% of lost wages), accounting for roughly a quarter of those to whom it was awarded. The percentage of them has fallen by 1.8 percent in the last year.

A replacement rate of 40% or above was created for 678.98 thousand persons out of the total number of pensioners who retired in 2020 (780.87 thousand) (87 percent ). However, as in 2019, the major reason for this was that 75% of these individuals had a monthly wage of no more than 20 thousand rubles before retirement.

According to a study by the Accounts Chamber, the PFR budget’s revenues in 2020 were more over 10 trillion rubles, up 17.3 percent from 2019, owing mostly to an increase in transfers from the federal budget. The percentage of received inter-budgetary transfers in PFR income grew from 37.7% in 2019 to 46.5 percent in 2020, with nearly half of them (53.4%) going to pay insurance pensions.

In 2020, the PFR paid 7.414 billion rubles on insurance pension payments, up 361 billion rubles from the previous year. This is due to a rise in the size of insurance pensions (5.8%) and the number of non-working retirees, according to the Accounting Chamber (those who work are only eligible to an insurance pension that is not indexed.)

For the year, the number of insurance premiums paid to the Pension Fund fell by 206 billion rubles to 5.409 trillion rubles. At the same time, this year’s revenue is up 50 billion rubles, or 0.9 percent, from 2018.

As a consequence, the percentage of contributions in PFR income fell by 8.6% to 53 percent (from 61.6 percent in 2019), while the amount of money spent on paying insurance pensions fell by 2.9 percent to 73.7 percent (in 2019 – 76.6 percent ). The overall debt on obligatory pension insurance premiums grew by 6 billion rubles (2.5 percent) in 2020, reaching 265 billion rubles at the start of 2021; 36 percent of this debt is owed by individual enterprises.