Experts told how the size of payments to pensioners will change next year
Starting 2025 in Russia, old-age insurance pensions for non-working citizens will be indexed twice a year. From February 1, they will increase by the percentage of inflation, and from April 1 — by the percentage of income from the investment portfolio. This was reported by Svetlana Bessarab, a member of the State Duma Committee on Labor. At the same time, social pensions will continue to be indexed only once a year. Why the authorities decided to take this step and how much the pensions of unemployed Russians will increase as a result, MK found out from experts.
In total, 43 million citizens in Russia receive pensions of all types. To prevent their income from being depreciated by inflation, the government indexes pensions at least once a year. The largest category of pensioners in our country are recipients of old-age insurance pensions. According to data for 2023, there were 33.38 million people in Russia. Over the year, the number of insurance pension recipients decreased by more than 885 thousand people due to a break in the assignment of old-age pensions as part of the pension reform. Starting next year, the pensions of these Russians will be increased twice. “Old-age insurance pensions for non-working pensioners will be indexed, starting in 2025, twice a year: from February 1 by the percentage of inflation and from April 1 by the percentage of income from the investment portfolio,” said Svetlana Bessarab. It is curious that indexation twice a year occurred earlier, for example, until 2019. “However, during the transition period of the pension reform, adjustments occurred,” recalls Andrei Girinsky, associate professor of the Faculty of Economics of RUDN University. “In 2025 and 2026, it is planned to return to previously proven practices, taking into account the realities of today.”
If everything is clear with indexation to the inflation rate: Rosstat will report to the government data on price increases and the authorities will decide to increase payments by this amount. For example, in 2023, official inflation, according to the department, amounted to 7.42%. From January 1, 2024, the pension was indexed by 7.5%, which at the time the government signed the indexation documents corresponded to calculations of the final price increase last year. In the same way, pensions will be increased based on inflation in 2025.
However, how significant the increase in pensions will be from April 1 is a more interesting question. As Alexander Safonov, a professor at the Financial University under the Government of the Russian Federation, pointed out, from 2001 until 2014, there was a mandatory savings system in the Russian Federation: funds in the amount of 6% of salaries were accumulated in the personal accounts of citizens. Some citizens chose non-state pension funds to manage these funds, while the rest, the so-called “silent ones,” left these funds in the Pension Fund of Russia (PFR). He, in turn, transferred this money to the management of VEB for investment and receiving additional income, which is transferred to the personal accounts of the “silent people”. These funds are the result of investing the investment portfolio. The amount of income from pension savings amounted to 31.9 billion rubles in 2021, and payments to the Pension Fund of the Russian Federation on funded pensions amounted to 30.8 billion rubles. In addition, the Pension Fund of Russia places through deposit auctions its reserves for compulsory pension insurance and funds temporarily held by it for funded pensions, which it transfers to non-state pension funds by order of citizens. In 2022, such funds were placed in the amount of 436.6 billion rubles, and the income from the placement amounted to 18.6 billion rubles. “These funds can be used to increase the pensions of non-working pensioners, that is, in monthly terms, this amount can be a little more than 50 rubles per month for each,” the expert explained. There are other calculations. “Preliminary pension adjustments in April 2025 are planned to be made within 3.8% and, thus, the target (target) pension value will be on average 24,120 rubles,” says Girinsky. Let us remind you that, according to the Ministry of Labor, the average old-age pension in 2024 is 23,405 rubles, that is, the increase next year will be 715 rubles. “Since VEB invests primarily in government securities, negative returns on such investments are unlikely,” Natalya Milchakova, leading analyst at Freedom Finance Global, explains the government’s actions. “However, compared to investments in stocks or precious metals, the return on investment in government securities is significantly lower.” In addition, changing the mechanism for indexing pensions, even upward, will still not resolve the issue of the very low fixed part of the old-age pension, which this year was indexed to 8,134.88 rubles, or up to $88 in dollar equivalent.
It would be more effective to tie the indexation of pensions not to inflation or to the yield of the government securities portfolio, but to the rate of depreciation of the ruble, especially since the government expects further weakening of the Russian currency. But the state will not agree to this, since there is not much money in the budget, Milchakova emphasized.