Recently, the Government has been increasingly talking about the abolition of pensions for military personnel in 2020. Information about the cancellation began to appear when the NIFI under the Ministry of Finance was given instructions to analyze how the pension is formed and how it is calculated.
At the moment, the key factor for calculating pensions is length of service. The size of the pension will depend on the number of years worked. Now the statements of the Ministry of Finance and the Government of the Russian Federation are used instead of length of service “Social package”. This causes a lot of negativity on the part of citizens and reduces confidence that the state will not abandon its citizens in old age.
Some may think that then the motivation and attractiveness of a military career for young people will decrease. But, on the other hand, with the introduction of social packages, military personnel retiring at a young age will also receive payments - weekend benefits. Currently, a pension is accrued if the length of service is at least 20 years. Or 25 years when the military age is 45. Half of this period should be devoted to the army. If the long-service pension is replaced with a social package - even if you end your career early for any reason (health, family circumstances, and so on), the military man will still receive something.
Will military pensions be cancelled?
At the moment, it is impossible to say definitively whether military pensions will be abolished or not. Nothing other than the proposal of the Financial Research Institute on this issue was voiced from official sources, and no legislative projects were submitted for consideration.
However, if by military pensions we mean in general the pension benefits received by military personnel and former employees of services equivalent to them (law enforcement agencies, security services, fire protection, etc.), then, according to expert estimates, budget savings from the abolition of military pensions could would amount to about 500-700 billion rubles per year.
Since this is a large amount for the federal budget in times of crisis, questions about the need to reform the military pension system in one form or another will arise more than once. For example, in 2020, the annual increase in the reduction coefficient provided for by law was not carried out. Its change took place only on October 1, 2020 - from 72.23% to 73.68%.
Should we expect an increase in pensions for military personnel in 2021?
How quickly pensions for Russian army employees will be raised is influenced by the government’s decision to implement the initiative of the head of the ASI. If the initiative is finally rejected, then Russian military pensioners can expect indexation of pensions towards the end of next year according to the most optimistic forecasts, namely in the fourth quarter of 2021.
The authorities plan to index military pensions in October 2021. It is expected that the reduction factor will increase to 76.66%.
If Svetlana Chupsheva’s initiative is supported, then the pension provision for the Russian army will undergo significant changes. First of all, the indexation rate will be increased. Also, existing restrictions regarding currently working military pensioners will be lifted, and the scheduled indexation dates will be postponed.
What was proposed as a reform of the military pension system?
Judging by the explanations that Vladimir Nazarov gave in October 2016 to Nezavisimaya Gazeta regarding his previously voiced proposals to abolish military pensions, if such a project (pension reform) had actually been implemented, it would not have affected existing military pensioners - citizens would have continued receive assigned pensions. According to Nazarov, the reform should have been based, first of all, on a gradual adjustment of the rules for the retirement of military personnel.
This implies a change in length of service requirements, the introduction of a progressive “age - length of service” scale, which will allow a citizen who has more work experience and a higher rank to retire earlier. After dismissal, it is planned to provide the citizen with a one-time cash benefit and provide the opportunity to complete a training program and find employment within the framework of the newly acquired profession.
“... Those who are planning to retire from the military should be offered a normal social contract instead of a pension. When a person finishes military service, if he is not disabled and everything is fine, you need to give him money for retraining, give him a large severance pay so that he has enough for a year or two of comfortable life and after that he can work just like a normal member of society at another job." — Vladimir Nazarov, member of the board of the Ministry of Finance of Russia and director of NIFI (radio “Echo of Moscow” dated 10/11/2016)
Regulatory framework
The Basic Law on Pensions for Military Personnel contains the conditions for granting pensions. According to the Law of the Russian Federation No. 4468-I dated February 12, 1993, pensioners apply for the following types of payments:
- by length of service;
- on disability;
- for the loss of a breadwinner.
For the first type, the main condition is to have at least 20 years of service. For military personnel who left for health reasons or were laid off after reaching the age threshold of 45 years, the main requirement is a total work experience of 25 years. Half of them should be military service or work in law enforcement agencies.
The law establishes the following pension amounts for military personnel:
- with 20 years of experience - 50% allowance and increase by 3% for every 12 months. The payout limit is 85% of maintenance.
- with a total work experience of 25 years and military service of at least 12.5 years - 50%, for the next 12 months they pay a 1% premium.
The second type is assigned after receiving disability during service or within 3 months after dismissal. For groups I and II, an amount of 85% is provided, and for group III – 50% of allowance. When registering for groups I and II due to illness, the provision is 75% each, and for group III - 40% of the content.
Issues regarding the maintenance of military pensioners are regulated by the following legal acts:
- Federal Law No. 166-FZ of December 15, 2001 guarantees the payment of pensions to military personnel.
- Federal Law No. 76-FZ of May 27. 1998 - confirms the right to social protection and cash benefits.
- Decree of the Government of the Russian Federation No. 941 of September 22, 1993 - contains the procedure for calculating length of service and the amount of pensions.
- Decree of the Government of the Russian Federation No. 992 of December 5, 2011 - includes a list of salaries for different positions and ranks.
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Cancellation of the reduction coefficient for military pensioners
Currently, pensions for military pensioners are calculated based on the pay of military personnel. It, in turn, consists of salaries in accordance with the position and rank, as well as other additional allowances for:
- length of service;
- class qualifications;
- special conditions of service;
- performing tasks associated with a threat to life and health;
- special achievements in service, etc.
Since January 1, 2012, Article 43 of the Law of the Russian Federation No. 4468-I dated February 12, 1993, monetary allowances for calculating pensions are not taken into account in full, but only in the amount of 54% (that is, taking into account the reduction factor). It was initially assumed that this value would increase by 2% annually until it reached 100%.
From October 1, 2020, the reduction coefficient is 73.68%. The government does not plan an increase in 2020.
It is noteworthy that back in 2014, deputies from the Communist Party faction introduced bill No. 631118-6, which proposed the abolition of the reduction factor for military pensioners. For several years, the bill was prepared for consideration, and then was rejected on February 22, 2020 during voting in the first reading, since, according to deputies, by establishing a reduction coefficient from January 1, 2012, “the legislator provided an appropriate compensation mechanism”, thanks to which the amount military pensions still increased significantly (by 90% from 2011 to 2020).
Only 19 deputies voted for the adoption of this law in the first reading in 2020, the remaining 431 did not vote at all (note that a quorum is considered valid if at least 226 deputies take part in the voting). Thus, the bill was rejected only because a quorum was not reached (only 4% of deputies voted).
No new bills providing for the abolition of the reduction factor for military pensions have been introduced for consideration. And in the near future, such changes are unlikely to be possible, due to the significant costs of their implementation (about 500 billion rubles of additional expenses per year).
What innovations are expected in connection with the pension reform?
In 2020, the Main Personnel Directorate of the Ministry of Defense prepared a bill regarding changes in the procedure for pension provision for military personnel, but so far the document has not been officially submitted to the State Duma.
Currently, to process payments to military personnel, 20 years of service are required; if the bill is adopted, this figure will reach 25 years.
The government indexes pensions for non-working military personnel. Since January 1, 2020, they have grown by 4%. Today, military pensioners receive up to 25.5 thousand rubles. The amount of compensation will increase in 2020 and 2020 in proportion to salary, regardless of position.
There is an expert opinion on the advisability of paying pensioners a lump sum benefit. Such a measure would support the military’s family while he learns a new profession. But the idea did not find support due to the instability of the economic situation.
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Mixed experience
Quite often a situation occurs when a person has work experience in civilian life and a certain period of military service. This situation affects the possibility of receiving a pension. According to current legislation, payments from pension authorities will be assigned to a person with related experience if 2 conditions are simultaneously met:
- service in the armed forces exceeds 12.5 years;
- work experience in civilian professions exceeds 12.5 years.
The amount of payments due will depend on earnings and overall length of service. The minimum is set at 50% of salaries/allowances. If the length of service exceeds the minimum, then the pension will increase.
Are payments indexed for working military pensioners?
The right to indexation of pension benefits for a former military personnel who continues to work depends on its type.
Thus, the insurance pension, as is known, is not subject to annual increase in the event that a person carries out activities from the income of which insurance contributions must be paid to the Pension Fund of the Russian Federation. Consequently, neither the employee nor the individual entrepreneur will receive an increase in pension benefits until the end of their activities.
In relation to military pensions, the legislator does not provide for such a limitation. This means that the provision of a former military personnel according to Law No. 4468-1 is subject to indexation established by law, regardless of whether he works after completing his service or not. itself depends on the size of the increase in the pay of military personnel (as a percentage of which the pension is calculated) and the increase in the so-called reduction coefficient.
Additional information about video indexing:
Will the reduction factor be canceled in 2020?
For the first time, the mechanism of the reducing coefficient was applied in practice in 2012. Initially, it was equal to 54% of the accrued pension amount. Its current value increased to 72.23% in January of this year, due to an increase in payments by 4%.
The increase in this coefficient affected many persons associated with military service, excluding former employees of the FSB, SVR, judges, current prosecutors and investigators serving in the Investigative Committee.
According to existing legislation, the abolition of the reduction coefficient is not in the government’s plans. However, there are forecasts as a result of which it will be reduced to 0%, after which military personnel will be able to receive payments in full. It is also necessary to take into account that the successful development of such a forecast depends on the results of the upcoming indexation of pensions for the military.
Increasing the retirement age for military personnel
The pension reform for military personnel assumes an increase in length of service for the assignment of benefits to 25 years. The bill developed by the Ministry of Defense is at the approval stage in the relevant ministries and departments, including the Ministry of Finance. To reduce discontent among the population, the transition will be gradual. The current rules for applying for benefits will remain.
Procedure for retirement during the transition period
If the bill is passed, a smooth transition to the new order is planned. Until January 1, 2023, the rule of 20 years of service will remain; military personnel will be able to retire according to the current rules.
Conditions for receiving a long-service pension
Current legislation provides that after 20 years of service, a military man has the right to count on pension provision from the state upon transfer to the reserve. In this case, the pension amount is initially set at 50% of the salary and increases by 3% for each additional year of service.
Important points related to military pensions based on length of service in the current legislation:
- The maximum amount of pension payments cannot exceed 85% of salary, regardless of length of service.
- You cannot receive pension payments and continue to serve at the same time; you need to choose one thing.
- Upon re-entry into service after dismissal and the assignment of a pension, its payment ceases, and monetary allowance is again assigned.
Length of service is not the only basis on which pension payments can be established. For example, they can be received by a military man with a medically confirmed disability or his widow if she has lost her breadwinner.
Increase in military pensions from January 1, 2019: Latest news from the State Duma
In the past year, it was initially expected to pay an additional 25% of the standard pension for a given case to all military personnel who worked for more than 20 years but did not retire.
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But the latest news shows that no big increase is expected, and the next indexation is planned no earlier than October 2019.
Also, the latest news from the State Duma makes it clear that the military pension from January 1, 2020 received a reserve from the budget in the amount of about 82 billion rubles for wages in the period from 2020 to 2020.
Only from October 1 of this year will it be possible to talk about how dynamic the indexing process will be in 2020. News MirTesen
Pension reform for the military
The biggest wave of indignation among Russians was caused by the pension reform. Many people still cannot understand why the government approved the scandalous law on raising the retirement age. Officials did not ignore the military either. According to government officials, only such measures can provide a decent pension for the country’s defenders.
Will pensions for January 2020 be delivered in December, how will the pension be paid?
According to official information, Russian President V.V. Putin has already signed a law according to which the retirement age will be raised for the military. Such innovations will take place as early as January 1, 2020. Anyone can familiarize themselves with the law on the official Internet portal of legal information of the Russian Federation.
Let us remind you that previously there were demands that military pensions be raised by 7% from January 1 next year. However, officials said that the increase will not occur earlier than October 2020, and even the increase will only be at the level of 6.3%.
