Can a citizen buy himself the right to early retirement? Yes, but only in Kazakhstan and far abroad – in the USA, Canada, Western Europe. At the state level, we do not even consider the possibility of granting such a right to Russians. At least, within the framework of social reforms that have already passed and are currently being discussed, the pension annuity does not appear. Although from year to year the authorities are announcing yet another “breakthrough” and deliberately disastrous project in Russian realities, the essence of which is as old as the world: people must save themselves for their old age, the days of Soviet-style pension paternalism are long gone.
There are several ways to become a pensioner early. For example, this is possible if a person has worked in hazardous or heavy production, served under a contract, gave birth to three or more children, or was laid off at pre-retirement age. But there is also a mechanism of the so-called retirement annuity, which in our country only experts know about. Annuity (fr. Annuité from lat. Annuus – annual, annual) is, in other words, a financial rent. How he works in the pension sector can be most clearly seen on the example of neighboring Kazakhstan.
In this republic, workers can retire as much as eight years earlier than the generally established deadline, if they conclude an agreement with one of the insurance companies. The retirement age for men begins here at 63 years, for women in 2021 – at 60 (in 2027 it will be equal to that for men after a gradual increase). An annuity has its own “sufficiency threshold”, that is, it is rigidly tied to the amount in the personal retirement account, which differs depending on the sex and age of the depositor. The older the person, the lower this threshold. For example, this year, in order to conclude a pension annuity agreement, a 55-year-old man must have an amount of 6.7 million tenge (1.1 million rubles), and a 52-year-old woman – 9 million tenge (1.5 million rubles).
Insurance for the rich
The experience of the post-Soviet republic, which is close to us in mentality and way of life, is quite indicative. Having gained independence, the largest fragment of the empire after Russia made an attempt to break with Soviet socio-economic standards, including in the pension sphere. In the era of wild capitalism, which dictated its own terms, this was difficult to do. The topic of the pension annuity first appeared in Kazakhstan in the early 2000s and initially only affected the wealthy contributors of pension funds.
These people were hunted by nimble agents of insurance companies, offering to retire early. It was only necessary to conclude an agreement with insurers and transfer their pension savings to them. And the companies, in return, pledged to pay the client for life insurance payments in an amount not lower than the minimum pension established for a given period. Few subscribed to this: a life pension seemed like something unreal, a gangster divorce for money.
However, the flywheel spun gradually. In 2009, citizens transferred about 3.5 billion tenge from pension funds to life insurance organizations (approximately 753 million Russian rubles at the then exchange rate of the Central Bank of the Russian Federation). After the conclusion of the agreement, this money was transferred to an individual retirement account in the bank. On a deposit at 10% per annum, they clearly outweighed all the charms of payments from the pension fund. But in June 2013, the state “closed the shop”: in connection with the transfer of the savings of Kazakhstanis to the Unified Accumulative Pension Fund (UAPF), the sale of annuities was canceled. After the ban was lifted in May 2014, annuities doubled in price, and then the sufficiency thresholds only grew.
What are the main advantages of a retirement annuity? Firstly, it is an opportunity to start receiving pension insurance payments ahead of schedule. Secondly, they are produced until the end of life (and with annual indexation), regardless of whether a person has run out of pension savings or not. Whereas in the case of the UAPF – only up to 80 years old, and only until the moment the funds are in the account. The main disadvantage is that the bulk of the population cannot afford it: if your capital does not reach the legislatively established threshold, there is nothing to count on. In addition, after the transfer to the insurance company, the funds are no longer the property of the depositor. That is, he will not be able to pick them up, use, remove them when moving to another state for permanent residence. And in the event of the death of the depositor, his savings will not be able to be inherited by his relatives.
The most important statistical detail in the overall picture: there are 2.2 million pensioners receiving insurance pension payments from the state (from the UAPF) in Kazakhstan. And about 61 thousand people have concluded pension annuity agreements to date. This is 2.7% of the total number of Kazakh pensioners. Thus, there is no need to talk about this practice as a massive, all-encompassing phenomenon. Rather, as a niche. And hardly in the foreseeable future, the Kazakh experience can be transferred to Russian soil. For very many reasons, the key of which is a total lack of money combined with a historical lack of trust in any initiatives of the authorities, especially financial and long-term ones.
If wages are low and employment is precarious
“In this case, everything depends on the problem of low incomes, on the level of well-being of the population,” says Alexander Safonov, professor at the Financial University under the Government of the Russian Federation. – During the period of labor activity, the bulk of Kazakhstanis do not generate enough money to set aside them for future retirement by concluding a pension annuity agreement with an insurance company. 2.7% is an eloquent indicator. It’s another matter if the country is rich, if the citizens are well paid, as in Denmark, Sweden, Norway. ”
If wages are low and employment is precarious, it is difficult to create an effective funded system. At the same time, Safonov recalls, in developed countries such a system does not exist in isolation, but as an integral element of a single, comprehensive, multifaceted mechanism of pension provision. So in Russia, the idea of a pension annuity has no future yet.
“According to the latest research by the Central Bank, 65% of Russians have no savings at all, and only 15% of the population have a relatively high level of well-being,” continues the thought of his colleague at the Financial University, Professor Alexei Zubets. “In addition, by investing in a retirement annuity, people thus reduce their own salaries and, accordingly, the cost of current consumption. It’s one thing if a person has alternative sources of funding, such as rent. At the same time, he is not inclined to work in an office or at work, but wants to receive a pension as the minimum guaranteed income. Then yes, annuity is his case. But there are only a few percent of such in Russia, and the rest intend to work as long as possible in order to receive the state insurance pension (regardless of its size), and not worry about anything else. ”
If we talk about Western countries, then, on the one hand, there is a non-state pension system, and on the other, a non-state life insurance system. In the first case, Zubets notes, we are talking about an instrument of long-term accumulation, which intersects with the topic of a pension annuity only indirectly. People start saving this money from the age of 20, and then, having reached old age, they use it as the main resource. As for life insurance contracts, the same Americans or Germans conclude them for long periods, using really large sums. In Russia, where tens of millions of such contracts are concluded a year, the terms are short, and the money.
“The government was unable to abandon the Soviet system of compulsory pension insurance and propose in return a mechanism focused on modern market conditions,” says Lyudmila Ivanova-Shvets, associate professor of the PRUE. Plekhanov. – With a socially oriented policy and the responsibility of the state to citizens, it is important to strive for maximum activity and punctuality from the latter in the formation of their pension savings. At the same time, people are constantly reminded that they, and not the Pension Fund, are more responsible for their pension. But after a certain number of failed reforms in the pension sector, the population ceased to trust any regular government innovations. Perhaps the experience with a pension annuity in Kazakhstan will be interesting to some of the Russians, but nothing more. ”
Such long-term projects should have a number of fundamentally important qualities – attractiveness for broad strata, the ability to compete on equal terms with other forms of social payments, and finally, stability. But what is the stability in conditions when the state behaves openly inconsistently, annually voicing new ideas and abandoning old ones? In addition, Ivanova-Shvets sums up, although Russia has long passed to the market, citizens have not learned to think in market categories, have not developed appropriate behavior. That is, in our country, neither the state nor the population contributes to the promotion of advanced ideas.
So, let’s draw a line under all of the above: Russians will not be able to acquire the right to early retirement, even if someone wants to – there is no such option in the non-state pension insurance system (which itself continues to be in its infancy). And even if there were, then, most likely, it would have remained unclaimed for the overwhelming majority of citizens.