Pension recipients to receive supplemental payments starting from August 1st
In Russia, a significant change is underway for its pensioners. Starting from August 1, 2023, pensions for working elderly individuals are being recalculated, marking a departure from the regular pension indexing process. This recalculation is designed to specifically adjust the pensions of employed retirees, taking into account their continued work.
Unlike pension indexing, which raises all pensions uniformly to keep pace with inflation or wage growth, this recalculation increases the pensions of working pensioners based on their employment status. Approximately 8 million working pensioners in Russia are expected to benefit from this recalculation.
The recalculation awards additional pension points for an extra year of official work, with each point worth 145.7 rubles. To earn the maximum three points, a working pensioner's monthly salary in the previous year should have been at least 55,600 rubles. This means that one in five pensioners in Russia could receive an increase due to the recalculation, with the maximum increase standing at 437 rubles.
It's important to note that this recalculation differs fundamentally from pension indexing. While indexing is primarily to offset inflation or align pensions with average salary growth, the recalculation for working pensioners effectively recognises their ongoing contributions and adjusts their pensions accordingly, ensuring that their pension does not stagnate due to continued work.
This change aligns with recent efforts in Russia aimed at improving pension conditions for employed elderly, impacting a large segment of the pension population. However, the specific details of this recalculation, as of the current news, do not have a directly cited source, but this is the established understanding from relevant pension reforms known up to 2023.
Furthermore, starting from January 1, 2025, working pensioners will have their pensions indexed again, but according to a separate scheme. If a working pensioner retires in July 2025, their pension will increase not only due to the pension points earned in 2024, but also due to a more comprehensive recalculation, including all indexations according to the full program.
As of the current news, there is a trend in Russia where grandmas are becoming richer than grandpas due to the pension increase. This shift underscores the impact of these changes on the lives of Russia's elderly population.
In conclusion, the pension recalculation for working pensioners in Russia represents a significant step towards recognising and rewarding the ongoing contributions of employed retirees. The recalculation is set to benefit millions of pensioners, providing them with a much-needed boost in their retirement income.
The recalculation of pensions for working pensioners in Russia, commencing August 1, 2023, is expected to have a substantial impact on personal-finance matters within the business sector. This change, unlike traditional pension indexing, will adjust pensions based on employment status, offering additional pension points for an extra year of official work.
The implementation of this recalculation strategy could potentially redefine retirement income for millions of working pensioners, marking a significant shift in personal-finance and business dynamics for Russia's elderly population.
