Putin Makes Russian Pension Reforms Law

An extra $7.6 billion from the government will help finance the operation, which gradually raises the national retirement age over the next five years.

President Vladimir Putin made Russia’s unpopular pension reform, which will gradually raise the national retirement ages through 2023, official Wednesday.

The bill was approved by the Federation Council, Russia’s upper house, several hours before Putin’s decision.

Under the new provision, which seeks to stabilize the nation’s economy, men will now wait until age 65 to collect their benefits. Women can do so at age 60. The previous retirement ages were 60 for men and 55 for women.

The ages will increase gradually until 2023 to the new levels.

Putin told cabinet members Tuesday that no additional budget revenue was expected from the move. Finance Minister Anton Siluanov said the government will transfer ₽500 billion ($7.6 billion) to the state pension fund to finance the operation.

“It is true, we do not expect any additional revenue from the pension law changes and, on the contrary, we will even increase financial transfers to the Pension Fund,” he told the Moscow Times.

The reforms have been an issue in Russia since June, when an earlier version passed in the lower house, known as the State Duma. Constant protests and diminishing approval ratings meant Putin, who had previously said the pension laws would not be touched under his rule, had to intervene. He did so in a televised broadcast in August, but rather than revoke the bill before its second of three Duma readings, the president softened it up.

Putin rolled back the initially proposed pension hike for women (age 63), and also added several security measures for those within five years of retirement, which included a higher unemployment collection and a clause that would penalize companies for discriminating against them. The pre-retirement incentives were also approved.

These changes, however, did not appease citizens, especially the age boost. Given the average life expectancy in Russia is 66 for men and 77 for women, most residents are now considering their retirements a pipe dream. The younger generation is also worried that they will find employment difficult as the old must work longer at their jobs that are now better protected.

A mid-September poll by the independent Levada Center showed 11% of Russia’s population supported the policy. The number of willing protesters, however, decreased by 53%, to 35%—a telltale sign that many a Russian had given up on a clawback.

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