Drivers of pension growth in the long term

Abstract

One of the main challenges for the Russian insurance pension system in the long term is to sustain an acceptable ratio of pensions to wages and to prevent the growth of the share of pensioners with unacceptably low pensions. The key challenges and factors affecting the level of pensions have been identified. A set of potential measures for a more acceptable dynamics of pensions, their risks and limitations have been revealed. Forecast calculations for the period up to 2050 on the model of the Russian insurance pension system developed by the authors made it possible to estimate the impact of relevant factors and measures on key pension indicators. It is shown that the implementation of these measures can ensure in 2030—2050: the coefficient of the relative level of pensions (to average wage) of about 40%; the theoretical replacement rate (at 35 years of service and the average wage in Russia) of about 50%; the ratio of the average pension payment to non-working recipients of the old-age insurance pension to the subsistence minimum for pensioners — about 250% in 2030—2035 and 380% by 2050; reducing the share of those whose pension payment is less than the minimum subsistence level, almost by half relative to the inertial scenario — to 6—8%.