Seminar of the International Labor Organization "International practice to improve national systems and raising the retirement age " Actuarial justification the retirement age in Russia: preconditions and consequences of its increasing prof. Solovev A. K. Head of Actuarial Department and Strategic Planning of the Pension Fund of the Russian Federation 13-14 September Geneva - 2016

Target evaluation criteria of raising the retirement age in Russia 1. Achieving decent standard of pensions for all socio-demographic groups of the population: - Achievement of the replacement rate of the labor old-age pension up to 40% of lost wages (with the regulatory experience and the average salary) - Provision of a medium-sized labor retirement pension at the level of 2,5 - 3 pensioner subsistence minimums 2. The financial security of long-term government pension liabilities 3. Promote the active participation of all categories of able-bodied citizens in shaping their own pension rights

Objective preconditions of the retirement age increasing: the growth of demographic burden (pensioners / employed

The consequences of raising the retirement age: Forecast of pension burden reduction by increasing the retirement age, mln. people.

Forecast of reduction in the expected repayment period, years

Results of raising the retirement age: Forecast of savings (-) from raising the retirement age   2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2040 2050 Reducing the number of pensioners, mln. / Year - -1,1 -1,5 -2,1 -2,7 -3,3 -4,0 -4,6 -5,2 -5,3 -10,0 -9,5 Transfers from the federal budget,   bn. rub. -65 -166 -253 -288 -279 -319 -251 -183 -147 9 126 89 230 327 548 1 207 %GDP -0,07 -0,16 -0,23 -0,24 -0,21 -0,17 -0,11 -0,09 0,01 0,07 0,04 0,11 0,14 0,16 0,28 Expenditure growth (+) , savings(-). The 1st stage of pension age increasing: 2017 - 3 months. per year to 61 years for men and to 56 years for women; Stage 2: 2023 - for six months a year to 65 years for men and to 63 years for women. Expenditure of the distribution component of the Russian Pension Fund budget, bln 6 536 6 861 7 175 7 457 7 803 8 103 8 383 8 648 8 911 9 190 9 480 9 896 10 366 10 837 16 439 23 141 The savings from raising the retirement age as a% of the expences of distribution component of the Russian Pension Fund budget, % -1,0 -2,4 -3,5 -3,9 -3,6 -3,0 -2,1 -1,6 0,1 1,3 0,9 2,2 3,0 3,3 5,2

Forecast of faster growth value of pension points concerning the reduction the labour pension recipients and the amount of individual pension coefficients

Actuarial reasonable set of measures for insurance mechanisms of the pension system Strengthening the revenue side of the budget: Actuarial adjustment of the tariff policy (rate and size of insured wage base); an increase in the requirements for the duration of insurance for the replacement rate; regulation of funded component; abolition of all the privileges on pension contributions (in accordance with the activities, self- employed people); 2. The reduction of budget expenditures by reducing payments and non-contributory redistribution: Financing early period of the pension before reaching the retirement age from the pension contributions at the generally established conditions; Employment creation to stimulate the continuation of work after the normal retirement age; Increasing the normal retirement age on the basis of real Russian demographic and economic conditions