How is the pension payment fund formed?
Pensions were paid to Russian citizens before, but the pension payment fund was formed from the state budget. Contributions to social insurance, including pensions, were made by enterprises and were very small, but a significant share of enterprise profits was transferred to the state budget.
Contributions were not taken from employees at all, because our older generation received salaries from the state, since they worked for it; there were no commercial structures. Therefore, there was no point in the state withholding pension contributions. Everything was included in the budget; when assigning a pension, salary and length of service were taken into account.
Now, taking into account the fact that a person can work both in a commercial structure and in the civil service, the employer transfers contributions to the Pension Fund.
It is the employer from the Payroll Fund, and not you personally from your salary, that is the answer to the remark “I’ve been crying all my life!”
What percentage of your salary goes to the pension fund?
According to current Russian legislation, contributions to the Pension Fund from the salaries of its employees must be made by the employer. At the same time, many are interested in specific numbers, since people often want to keep all their income and expenses under control. In addition, the pension also depends on the size of payments. Naturally, no one wants their income to drop significantly after retirement. What contributions to the Pension Fund does the employer pay from employee salaries? Let's look at insurance contributions to the Pension Fund in more detail. Currently, 22 percent of their wages are withheld from employees in the Pension Fund.
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Moreover, in this case, as mentioned above, the employer must pay. These are, in particular, individuals, individual entrepreneurs, enterprises and organizations. However, there is a category of citizens who must pay contributions to the Pension Fund on their own.
Types of pensions
All pensions around the world are divided into distribution and funded
.
With a funded pension system
contributions are not spent on payments to current pensioners, but are taken into account in a separate account for each, invested and generating income.
The advantage of the system is that it is little affected by a decrease in the birth rate, an increase in life expectancy and, as a consequence, an increase in the number of pensioners. As much as a person has accumulated, that is what he will receive. The demographic situation worries him little.
Minuses:
• in such a system, those who cannot save for a pension themselves are defenseless: disabled people, people with little experience, mothers of many children, etc. Their relatives, who bear the burden of providing for them, are also vulnerable. All these people can only wait for mercy from the state
• the size of the pension greatly depends on the chosen investment strategy. We often hear about the profitability of non-state pension funds, and the situation there is not rosy.
Distribution system
works on the principle of solidarity or mutual assistance between generations. Therefore, it is also called solidary. Working people use their contributions to provide for the lives of pensioners. That is, each generation receives pensions at the expense of the next. In this case, the paid contributions are not invested, but are used to pay current pensions.
An advantage of the distribution system is that pensions are also received by those who were unable to provide themselves with pensions with their own contributions.
The downside is that it depends on the demographic situation. The system depends on the ratio of income (namely, the number of payers and the amount of contributions) and expenses, that is, the number of pensioners and the amount of payments. If the birth rate falls and life expectancy increases, current contributions are no longer enough to pay pensions.
And which of these systems is better?
The good thing about the savings system is that your contributions are yours alone. If they exist, and if there are enough of them. And if not, then that's just your problem. Do you want such a scheme for yourself?
And remember that with such a system, if your parents have not saved for their retirement, then this is also your problem.
If your wife gave birth to several children, and because of this, her contributions are not enough for a normal pension, this will also be your problem.
And the wife also has parents, and if for some reason they didn’t save for retirement, then guess whose problem it is? Isn't that a lot for one person?
It turns out that the funded system is good for healthy single people without low-income parents. Harsh, but true. The rest benefit from a solidarity system, in which they can at least be protected from excessive load.
In Russia, we have a distribution or solidarity pension system, so we will continue to talk about the distribution system.
How much is deducted to the pension fund from salary percentage of contributions to the Pension Fund of the Russian Federation
The question of how much percent of the accrued salary goes to the pension fund worries many employed citizens. As you know, everyone who is officially employed must pay tax on their income. And one of the contributions is made to the Pension Fund of the Russian Federation.
Now let’s figure out how much percent of your salary you have to pay, as well as what other types of payments exist. Because every working person should know how much is withheld from his salary for various government agencies. Key points: Wages are monetary remuneration paid by an employer to a person for work. It can be divided into main and additional. The first type includes the salary that is set by the organization. And the additional part is formed in connection with a specific situation, and a person is not always entitled to these payments.
Russian realities
When we get a job, we agree on the salary we are entitled to, which we receive in our hands minus 13% income tax.
Let’s say you are lucky enough to receive a “white” salary of 25 thousand rubles. In this case, a month of your work will cost the employer 32 thousand 500 rubles. Of these, 7500 rub. will go to funds - pension, medical insurance and social insurance (including 22% to the Pension Fund of the Russian Federation - 5,500 rubles).
Next, these 5,500 rubles received by the Pension Fund are divided into three parts:
- basic (fixed) - 6% of the salary goes into it - 1500 rubles; — insurance (10% is 2500 rubles); — cumulative (6% is 1500 rubles).
First pile, 1500 rubles = 6%
- forget about her and don’t remember. They stack into one large cauldron. You will never see this money in your personal account. From these funds, together with funds from the budget, the smallest part of any pension is formed - the fixed basic part - this is a payment that has a strictly defined amount and is provided to all citizens, regardless of the basis on which support is assigned (old age, disability or loss of a breadwinner ), but in different amounts, which are specified in Article 16 of Federal Law No. 400.
Second pile, 2500 rubles = 10%
- this is the insurance part of the pension, it is reflected on your personal account and is written down in the letters of “happiness” that arrive by mail every year.
This money is not in a box. They are simply recorded on your personal account. And the money itself goes to pay pensions to those pensioners who are alive and well today. Now you are giving your insurance to pensioners, then young people will give it to you.
There is no money, there is some kind of conditional obligation of the state to you.
Third pile, 1500 rubles = 6%
- This is the funded part of the pension. Why cumulative?
Because it really accumulates. Of the 5,500 rubles that your employer sent to the pension fund for you, only these 1,500 remain alive. But they also do not lie there as dead weight in some stash.
This money really works in the economy. This money makes you money. They invest in some kind of production, enterprise, etc. This is handled by the State Administrator or the Non-State Pension Fund if you transferred your savings portion to it...
They spin your money, make a profit, and then share this profit with you. Every year the funded part increases due to this very profit, and of course due to new contributions from the employer.
Employees born in 1967 and younger had the right to form a funded portion.
It was... But in 2014, the government decided to “freeze” the funded part of the pension, according to the latest information, until 2021. At the same time, everyone was invited to transfer this savings part to any NPF - Non-State Pension Fund. There are 94 of them in Russia. Sberbank, Gazprom, and many other large companies have such a fund.
NPFs have much more opportunities to invest money so that they work with greater profit than Vnesheconombank.
Some transferred their savings portion to a non-state pension fund, while others did not.
But this money is not lost, it is still in the PF accounts, just not replenished, but when you retire, you can receive it either as a lump sum or in installments for each monthly pension.
After the “freezing”, the 22% that the employer transfers is now distributed as follows:
1. Fixed part – 6%; 2. Insurance part – 16%.
Self-employed population and insurance premiums
To ensure that self-employed people have a future pension benefit above the average subsistence level, there are several options:
- A citizen can continue to work officially under the Labor Code to accumulate experience and increase his pension. For this, management pays 13% of the salary to the Pension Fund. In his free time, a self-employed person engages in entrepreneurial activities without registration, which entails the risk of fines.
- The self-employed person takes part in compulsory pension insurance and contributes a monetary portion. This makes it possible to form a share of future payments on an insurance basis. Their amount depends on the person’s salary and the conditions that the Pension Fund offers him. For different professions of a person with self-employed status, insurance conditions may differ. The calculation period for compulsory insurance contributions regarding pensions is considered to be a calendar year. If you apply later than January, the remaining months are calculated according to the calendar until the end of the year. The self-employed will be offered a choice of minimum and maximum amounts for payments, the entries in the work book will be recalculated and points will be calculated. For one year of experience he receives 1 point.
- A citizen forms his own pension savings in third-party organizations. In this option, you can form part of the pension together with insurance. The conditions are equal for all self-employed professions. If after the death of a program participant the funds remain in the account, then the savings are transferred to younger generations.
To register with the Pension Fund of the Russian Federation, a self-employed person needs: a passport, an application and a document confirming the citizen’s self-employment. A package of documents is delivered by a person to the fund, or sent by letter to the post office. In response, the person will be sent a response letter with information about the person’s registration.
Then why do we need a new tax if there are already insurance premiums?
According to the authorities, the tax should become an alternative to the funded pension, which, by presidential decree, is frozen until 2020. With a mandatory contribution, the government wants to encourage citizens to save for their future pension on their own.
How will payments be made?
Unlike insurance premiums, the new tax will be deducted directly from the salary. For example, now only 13% of personal income tax is withheld from the average Russian salary of 41,100 rubles, and he receives 35,757 rubles. But according to the new rules, 6% of the new tax on pension insurance will be added to the 13% deduction. As a result, the “net” salary will be reduced to 33,291 rubles.
However, they promise to make the transition to the new pension contribution system gradual: contributions will increase by 1 percentage point annually. from 1% to 6%. It is curious that a similar scheme was proposed for the individual pension capital (IPC) system, which was supposed to replace the frozen funded pension starting next year. Only then these payments were called contributions, and not taxes. And they promised to send the funds to non-state pension funds, which citizens can choose on their own.
When will the new tax take effect?
The bill is currently under development, so the specific launch date for the tax is unknown. However, the authorities will definitely not be able to introduce it before January 1, 2020.
Will it be possible to refuse to pay taxes?
As the media found out, the government plans to automatically transfer working Russians to the new tax. But now there is no single decision as to whether it will be possible to abandon it. True, it is assumed that Russians will be able to refuse the fiscal contribution upon written application to the accounting department.
By the way, a similar procedure was proposed for the IPC a year ago. Perhaps the pension capital system project simply “grew” into a tax on pension insurance.
What do the experts think?
According to a survey by the Banks Today portal, experts and market participants doubt that the system will work. Representative of NPF LUKOIL-Garant Sergei Erlik believes that citizens will refuse to participate in such a savings system if there is such an opportunity.
