"Izvestia": “Government to Raise Pensions and to Implement Pension Reform”
The current financial and economic crisis will not influence the Government's plans to overhaul the pension system. Pensions will be raised on schedule, while employers will have to pay more into the Pension Fund. The unified social tax will be replaced with insurance premiums.
Prime Minister Vladimir Putin discussed pension issues the other day.
First, Mr Putin mentioned the need to raise pensions to minimal subsistence levels. Officials have made unprecedented allocations to accomplish this objective. Izvestia has stated that pensions will be raised four times this year.
"We will not economise on these items. On the contrary, we will increase Pension Fund subsidies by a substantial 374 billion roubles," Mr Putin said.
Although this decision is final, financing the pension reform remains unclear. Six months ago, the Government decided that, starting in 2010, Russian companies will finance the Pension Fund in a new way for the purpose of eliminating its deficit. Insurance premiums will replace the unified social tax. Companies will have to pay 26 kopecks, rather than the present 20 kopecks, per each rouble earned by an employee. On March 25, this issue was discussed behind closed doors. However, two economics ministries opposed the new plan on March 24.
"We believe the decisions to increase the business community's tax burden, primarily the wage-fund tax burden, are untimely," Economic Development Minister Elvira Nabiullina said. Deputy Finance Minister Sergei Shatalov said the unified social tax reform could be postponed until the end of the crisis.
The paper's sources in the Government said nobody would renounce the plans, but that the unified social tax reform could be postponed.
Anastasia Savinykh
