Strengthening of the Concepts of Reforming Foreign Pension Systems in the Pension Reform of the Russian Federation

Abstract

Currently, as a result of ongoing pension reforms Russia is seeking to build a pension system based on the experience of other countries. At the same time, in 2015 upon entry into force of the Federal law “About insurance pensions” the “step back” and return to the system of distribution was practically done, which is called the “solidarity of generations” pension system. It is assumed that, abandoning the funded component will also address the issue of reducing the budget deficit of the FIU due to its redistribution in the insurance part. This decision was based on the analysis of successful functioning of the foreign pension distribution systems. But we must not forget that all these systems have a number of serious differences from the Russian model. In this regard, the paper presents the comparative analysis of some foreign pension systems by criteria: type of system, types of pensions, retirement age, pensionable service, retirement age, rate of insurance contributions and the principles of its financing. The effectiveness of pension provision in different countries is also compared using the ratio of pension substitution. Based on this analysis, recommendations for more effective reform of the Russian pension system are given. First, it is the strengthening of the role of the personal participation of the insured persons in financing of insurance premiums, and both voluntary and mandatory. Secondly, it is the establishment of occupational pension system (which will result in mandatory labor occupational pensions) and increased interest in it of the employers (for example, in exchange for reducing the burden of their paid premiums). And, thirdly, it is the consideration of the possibility of raising the retirement age very gradually and differentially. The recommended actions, in our opinion, will benefit the formation of the budget of the Pension Fund of Russia and will lead to the reduction of its budget deficit.