Self-employed individuals numbering over 2700 in Yakutia are fashioning their own retirement plans
In Russia, self-employed individuals under the "tax on professional income" (NPD) regime have specific features that impact their eligibility and pension size, including in Yakutia. Unlike those employed under the standard system, self-employed individuals do not automatically contribute to the Social Fund of Russia (SFR) which finances the old-age insurance pension.
This means that they do not accumulate insurance history (years of insurance experience) or Individual Pension Coefficients (IPC), points used to calculate pension amounts based on contributions and earnings. To build pension savings, self-employed people under NPD must make separate voluntary insurance contributions to the Social Fund if they want to accumulate pension rights. Failure to do so may result in receiving only a social pension, which is lower in amount and has payments starting five years later than the insurance pension.
The exact minimum and maximum contribution amounts are not detailed, but it is implied that self-employed under NPD pay only 4-6% income tax on their professional income but do not pay mandatory pension insurance contributions automatically. To build pension savings, they need to make voluntary contributions to the Social Fund, which can correspond to the minimal or maximum thresholds set by Russian pension law for insurance contributions.
Insurance history refers to years during which the individual has made pension insurance contributions, while IPC points accrue proportionally to the amount of pension contributions made; more contribution means more points and a higher pension. Under the NPD regime, since mandatory contributions to the Social Fund are missing, the insurance history and IPC points do not accumulate unless voluntary payments are made. These IPC points are central to calculating the pension amount, so without them, the pension is minimal or social, which is significantly less.
The rules for pension accumulation apply uniformly across Russia, including Yakutia. Self-employed individuals in Yakutia should comply with the same requirements as elsewhere: voluntary purchase of pension experience or registration as an individual entrepreneur paying contributions to maintain pension rights.
In conclusion, self-employed individuals in Russia under the "tax on professional income" regime, including in Yakutia, must make voluntary contributions to the Social Fund to ensure pension rights and accumulation of IPC points. Without this, their pension will be limited to a lower social pension paid later. The maximum contribution amount should not exceed 473,932.80 rubles in 2025, and a full year of insurance history is earned if a self-employed individual is registered as a payer from January 1 to December 31. Self-employed individuals can choose to pay their pension contributions either all at once or in installments throughout the year.
- For self-employed individuals in Russia under the "tax on professional income" regime, including those in Yakutia, accumulating a substantial pension is contingent on making voluntary contributions to the Social Fund, as the lack of mandatory contributions leads to a minimal or social pension.
- To ensure a retirement income that is not a social pension, restricted in amount and delayed in payments, self-employed people in Yakutia need to contribute voluntarily to the Social Fund, meeting the minimum and maximum contribution thresholds set by Russian pension law, as failure to do so may result in limited pension rights.
