Pension reform – a palliative to patch a hole in a few years

The state Duma adopted in the first reading the government bill on raising the retirement age to 63 years for women and 65 years for men by 2034 and 2028 years respectively. Doctor of economic Sciences, Professor, Archimandrite Philipp (Simonov) – on why once again the government and the people found themselves on different sides of the issue.

Photo: Ross Coyle / Flickr

  • Pensions – why then it will be even worse
  • To live to 65: learn when it’s your time to relax
  • What’s wrong with raising the retirement age in Russia
  • The total abolition of pensions would be a step towards immortality – the Russians are kidding about raising the retirement age
  • Pension reform: people do not explain anything and hit with a brick on the head

The people, as always, extreme

I’ll try to Express my position from three points of view: as the political economist and historian of economic doctrines (as long as it is for those two specialties I am doctor of Sciences), as a historian (by education and part of their modern classes) and as a citizen.

I would like to make a reservation: I’m not an expert on the “Pensione”. Social security, including pension problem is a quite specific branch of economic science, and in this area I’m not a professional. And all I can say is my personal opinion, professionally quite vulgar (lat. vulgaris – simple, ordinary, vulgar, in General in the kitchen). However, only with these three – no touching, no Church, no theology. First of all, in the context that the issue of pensions of citizens of the state, and not the Church. To the Church it has no relation neither speculative nor practical.

Archimandrite Philipp (Simonov)

Everything that is not connected with being in Christ and our resurrection at the last day to eternal life, is hardly relevant to the Church. All that is relations between the state and its citizens, is a problem of the state and its citizens. Not the Church to solve it, as long as it does not become a state. And talking about this issue is necessary from the standpoint that earthly citizenship, so as not to ruin the sanctity of citizenship of the Church: although, that said, your pearls (MT. 7, 6).

But the problem is, anyway, challenging and often uncomfortable. We live in an age of doublethink puzzling social. With the collapse of the Soviet socialist model in the world to stop the competition of socio-economic systems. In the US, for example, the antitrust laws requires that in one market there were at least two big players – then the market is not considered a monopoly. And the world is now not these two players, the socio-economic “market” is monopolized and strictly dictates uniform rules for all its members. Yes, even on a global scale.

The oligarchic model of governance has become global, and repeatedly reproduced at the level of individual countries. Almost no exceptions. But why it is called a democracy, rule of law, society of equal opportunities, something like that.

– The reform is opposed by 92% of citizens of Russia. However, all experts say that this is a necessary measure. And you here with anyone – experts or the people?

– Strange question. Am I not people? I am the people.

Although I myself have been on various issues to be an expert, I have to say that the expert is always difficult. Some experts, for example, in 90-e years it was said that if 30 million people will physically cease to exist – it is natural: they de not fit into the market.

But the market does not fit much more people in the 90 years they have simply ceased to give birth. And then government, headed by the unforgettable head of it, whose name is now called libraries, etc., this trend only encouraged the economic potential of the country to squander on fertility spat, everywhere introduced the “family planning”, the institution of marriage was destroyed (and one Church was worried about this), images to replace those who are retiring, not ready, etc. I remember the head of the youth Committee Yakimenko, who inspired the children: why do you need to go to some Institute, where 5 years of you will train some engineers, when we are in 4 years will make you qualified managers?!

The main thing – to implement the recommendations of the IMF, and after us – the deluge.

The flood has come. Unlike Noah, the ark for it was not built: no consistent system of economic policy (except for such “belt-tightening”), does not solve the problem of effective management of cash flows generated from the natural monopoly, appointed from above “drivers” to pull the economy not.

So people (as long as the experts look at it not as on the basis of the economy and as voters, when push comes to shove, and as Guinea pigs, when to bake longer) nowhere to go.

So any “necessary measure”: on the one hand, there is no money, on the other – a shortage of personnel professionals (not managers). The people, as always, extreme. I wasn’t asking him – watch football, the spectacle provided, and about the bread – solve.

Only, surprisingly, not all glued to the screens. Under Yeltsin a trade Union lady on a formal meeting told the bitter truth: the main thing now – not to bring people into the streets, and to get him off the streets. I wonder: experts estimated the potential, or only believed the figures (if considered)?

Palliative, designed to patch a hole in a few years

– We already had two reforms, including funded pension. They do not help to improve the situation in the budget, why this should work?

First let’s separate flies from cutlets. The budget is another story, it is the responsibility of the Ministry of Finance, pensions – other. Pensions has been specially created for this purpose, the Institute approved a separate law by the budget of the state extrabudgetary Fund, the Pension Fund of Russia, to execute the function (seems to be not yet recognized surplus) government funds the pension system and safeguard the rights of citizens of the Russian Federation on pension provision. So that all our overtures regarding pensions should be directed to the correct address – in the direction of the management of the FIU.

The incident of the reform showed that the management of this was, to put it mildly, not so hot. Apparently, there are certain “market” dogma, which he had studied for “market” of textbooks, is practice which he simply does not know and does not want to know, but because it wants to bend under their own ideas, which may suitable for developed societies, but not applicable in the context of developing countries with undeveloped, non-diversified, tiny financial markets.

In the environment where we, with great difficulty, the banking system, all the while hopeful at least for some state aid, to assume that the main obsession of the pension “reform”, just with copied Western experience, – non-state pension funds (NPF) – suddenly effectively earn, was, sorry, at least naive.

She and West have only worked in conditions financially stable strong economies of Npfov a certain time have been effective where there has been a stable and long-term profitable areas of investments long-term investments that have accumulated in these funds. Basically – and it is also necessary to take into account – it was an investment in fictitious capital.

In a time when our economy long-term period is a year (at best three), and the effective investment tools can be counted on the fingers of one hand, talking about long-term (15-20 years) effective investment of pension savings through PPF – professional nonsense.

Especially with international experience: as soon as the economic situation in the West has been systematically destabilized, there is the pension system, based on long-term portfolio investments of private pension funds, had demonstrated its volatility, and we are talking about reducing benefits, raising the age, etc.

So do the rainbow background inherent in the former the reforms were about.


There is another factor, which have recently become widely alert. Here’s the latest news (July 31st), Ren, is the first that gave the search engine upon request of the FIU: “Magnitogorsk police detained a Love Stein – the head of the local branch of the Pension Fund of Russia”. Apparently, if the anti-corruption campaign will turn into the system, it will also provide significant cost savings, including the Pension Fund.

As for the new “reforms”, it should work just arithmetic: because the number of consumers of the pension system in the medium term will significantly reduce the conditions announced, we will not dwell on them.

In General, as in the prophet: the fathers have eaten sour grapes, and the children’s teeth are set on edge (jer. 31, 29-30).

It is not clear another: what will happen beyond this medium-term period. No reasonable calculations no one has yet seen. So it seems that it is a palliative, designed to patch a hole in a few years.

Demographic reason – the main problem? Or the fact that the government can not establish a normal pension system?

– Both true. The consequences of the “Russian cross,” the 90-ies, when the death rate overtook the birth rate, will not do. But the problem of controllability of the economy also can not be discounted. May not be a stable long-term situation is deeply polarized society, especially when economic “leaders” decide all questions of its welfare through creating a national well-being “bottom”.

– Why is now such a rapid pace decided to change pension legislation?

Because pensions need to pay at least that minimum size, which is set. And with that – tight, and more and will be tighter.

No real fundamental solutions which would earn at least in the medium term, nobody has yet invented – except for such a famous thoughts famous dignitaries that citizens must care for themselves (i.e. the system of pension funds – the professionals! – are unable to invest pension funds, and citizens will be able; this is leaving out the question about where it should be named the citizens to get the money for this care about yourself – from the salary 15-25 thousand less income, minus utilities, minus to eat and get dressed, minus one thing); it’s a good idea to contain children (cons already mentioned); what would “at” to buy apartment “at least 50 meters” (i.e. from the same named income to pay the mortgage) and to take it and so on.

A Pension Fund effectively manage the pension funds which are formed as a result of appropriate quasianalogue deductions (i.e., at least to ensure the preservation of value, not to increment) failed: since 2005, the FIU budget comes with a deficit, which is covered by allocations from the budget (that’s just where there are budget expenditures: quasianalogue in the form of pension contributions is not enough, have to include real taxes).

And extensive expand of the income to the pension system (say, due to some contributions, say, from the profits from hydrocarbons), and therefore, pensioners would be nice to “get out of the comfort zone” (E. Yampolskaya).

And we have a social state according to the Constitution (article 7) and “establish government pensions, benefits and other guarantees of social protection.”

– That in fact, the reform will give the state?

Let’s stop for a minute. What is the state? Administrative staff engaged in the distribution of budgetary resources, not paying attention to how they are then spent, according to the principle: the money is gone – mission accomplished? The economy that these resources are mobilized through taxes and profits and then consumes in the form of investments? People who directly produces and, by the way, pays taxes? It seems to me that each of the named blocks government believes it himself.

But still rather think that the state is a unity and the people, who delegated the duty of the authorities of public administration, and the office, and large economic agents, and many more components. Wherefore, as they say, you and taxes (φόρους) pay (cf: ROM. 13, 6). A failure in one of the many components inevitably affects the entire system.

The first expected result – the reduction of the deficit of the Pension Fund. However, many times, even on the official level, the view was expressed that the proposed measures – no more than a palliative. This seems to be true: the payments will naturally be reduced (due to the emergence of a new time lag), but no real proposals to change the pension system, increase of its efficiency has not yet been voiced. So, it will go on as before, as the mother put to the forest ahead, his back to Ivan, and after some time there will be a familiar song: bast-bast, start again.

The second expected result – the possibility of using of skilled labour in areas where there is actual or potential shortage due to demographic factors.

But this is also a temporary result: the pension building in the end, inevitably realized, the old cadres of the Soviet formations inevitably – a few years earlier, a few years later – will leave their jobs.

However, from the standpoint of rational use of labor resources, no nothing fundamental has not proposed either in terms of active extension, the system of training of personnel working specialties and the highly skilled engineering and technical personnel, doctors, teachers, scientific workers, etc., nor about raising the prestige (and hence wages) of occupations, which is the economy (I assure you she is not on the managers for cleaning services).

The only result that doesn’t realize, is the preservation of monopoly profits and windfall profits of the oligarchy.


Compromise unlikely to solve the problem

– From what sources to pay pensions?

– That is the main issue of a pension system and any pension reform.

No one has ever suggested anything other than how the responsibility of new generations for the welfare of the old in the framework of social justice: those who grew up in the social scale provide those who raised them. Although we do not personally pay any royalties, which make up a state pension (we are not talking about targeted personal contributions to their own retirement, savings, etc.) – they pay our employers, but let’s not forget: they pay our salary (i.e., this payment – the part of the employee’s salary, which he was not paid additionally, because there is a satisfaction of social needs).

The company takes the responsibility of preserving the resources (i.e. management so that, adjusted for inflation, their value has not decreased) is the responsibility of the Pension Fund (let’s not forget: pension Fund – state Fund and performs, thus, the public function). In the best case, these resources and you can increment through effective investments.

Other schemes within the borders of the welfare state the world has not offered.

– The CEC received the documents about the conduct of a possible referendum. If it comes to this and if you can already, at this stage, to change something?

– In the Constitution (article 39, part 2) says: “State pensions and social benefits are established by law.” Current Federal law “About labour pensions in the Russian Federation” (article 7, clause 1) says: “the Right to a retirement pension for old age have men aged 60 and women aged 55 years”.

Again, in the Constitution (article 55, part 2) said: “the Russian Federation should not make laws that abrogate or derogate the rights and freedoms of man and citizen”.

Adopted in the first reading the bill in this context is to a certain extent the conflict of laws: the right to a retirement pension itself is not affected, however, this age varies considerably, so that a certain contingent of citizens has a good chance not to wait for realization of their constitutional rights. And if you count this collision of constitutional, that is, articles 134-135 of the Constitution, which stipulate how to act in such cases. On a referendum it does not say.

– How to find a compromise to the state and the people reform like?

– A compromise is unlikely to solve the problem. The issue rests on the need for an integrated restructuring is not even pension – all economic system not only of production, exchange and consumption, and the factors that ensure the development of the reproductive process, beginning with the demographic policy, education and upbringing, system of formation of social values on which to build a personal scale of values finally, the system of distribution of the social product and wealth.

It’s hard – it’s hard to find the true Foundation of the social system.

Our “new” society – only materialistic in its basis, in the system of their values. We have become materialistic so much so that even in the Church of God required only an immediate miracle, it is the material properties.

This gross human materialism is already the Christ, Born wicked and the adulterer seeks signs, He said, but warned: there shall be no sign be given it, merely the sign of Jonah the prophet (Matt. 12, 39). This is something Ionyne the sign, the sign of Christ crucifiedIdiom temptation, Greek madness (1 Cor. 1, 23; 2 Cor. 2, 2), as would not to us: we need now, all at once, and preferably so that we are in no did not participate, and all of it would fall on us from above.

And somehow, we forgot about why we have gathered in the Church what the Church is gathered. You the freedom make your dreams fast, brethren <…> – stand in the liberty by which Christ has made us (Gal. 5, 1, 13). Church in one of its important task – the higher the image of the earthly society. Companies that God, like all human ages and it will come after the mind of truth Preeti (1 Tim. 2, 4), wants to see a free: be not again entangled with the yoke of bondage (Gal. 5, 1).

The Church, in Greek ἐκκλησία, the people’s Assembly, a meeting of citizens. The ancient Greek citizens (watered) going to the Assembly to decide the most important issues of the current life – peace and war, for example, features of public administration, etc., i.e. everything that directly affects the lives of everyone and therefore requires a common solution to social harmony.

We have no compromise: [not] (or [not] useful: εὔθετός ἐστιν) for the Kingdom of God no one, having put his hand to the plow and looking back (LK. 9, 62).

Christ purchased us to Himself (ἀγοράζω – bought!) [road] with a price (cf: 1 Cor. 6, 20; 7, 23), and we have only the Christ – given Christ – freedom.

The freedom to be co-creators with the Creator. Freedom with Him to create an intangible Holiness, embodied in part in the material social justice: you are the temple of the living God (2 Cor. 6, 16), and the space around you is the Holy of Holies; this is the law of the temple! (Ezek. 43, 12).

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