The government gave a negative opinion on the bill on the resumption of indexation of insurance pensions to working pensioners, thereby rejecting it. The document is published in the electronic database of the State Duma.
Why did the Cabinet of Ministers reject the bill?
The government’s conclusion says that the return of indexation will require additional costs. At the same time, the authors of the draft law did not indicate in the financial and economic justification for the document from which sources and in what order funds should be allocated, the government commission on legislative activity said in its response.
What is the bill?
The bill in question was developed by a group of deputies of the LDPR faction and a senator Sergey Leonov. They submitted the document for consideration to the State Duma on July 26, 2021.
The initiative assumed that the indexation of insurance pensions for working pensioners would be resumed from January 1, 2022. To do this, it was proposed to amend part 12 of Article 21 of the Federal Law “On insurance pensions” and to recognize as invalid Article 261 of this Federal Law, according to which the insurance pension and the fixed payment to the insurance pension to working pensioners are indexed, but are paid without taking into account the amounts of adjustment of their size.
In the explanatory note to the document, its authors indicated that after the abolition of the indexation of pensions for working pensioners in 2016, the number of such pensioners in Russia decreased from 15.3 million to 9.6 million people. At the same time, most of them began to work illegally so that insurance premiums would not be paid against them. As a result, regional and local budgets received less personal income tax, and extra-budgetary funds, including the Pension Fund of Russia (FIU), received cash receipts.
The legislators also noted that the lack of pension indexation is unfair to working pensioners and contradicts part 6 of Article 75 of the updated version of the Constitution of the Russian Federation.
The financial and economic justification for the draft law states that its adoption will entail additional expenses of the FIU in the amount of 524.6 billion rubles. It was proposed to finance them through the use of funds from the National Welfare Fund, as well as part of the federal budget surplus.
What does the rejection of the bill mean?
The recall of the government commission on legislative activity on the draft on the indexation of pensions to working pensioners concerns a specific document, and not the idea of pension indexation as such, the Ministry of Labor said.
The project was rejected because of its lack of development. The draft laws supported by the government should contain specific mechanisms for ensuring obligations, the ministry explained.
The Ministry of Labor added that the government is constantly working to analyze and improve forms of social support. If necessary, it introduces additional, targeted support measures.
How is the work being done to return the indexation of pensions to working pensioners?
Pensions of working pensioners have ceased to be indexed since January 1, 2016, in order to reduce the deficit of the FIU. Since that time, the issue of resuming indexation has been repeatedly raised, several draft laws have been prepared. Previously, the government issued negative opinions on such initiatives in 2017, 2019 and 2020.
Several bills on the return of indexing were prepared in 2021. In early April, the Legislative Assembly of Sevastopol submitted a corresponding draft law to the State Duma. It is still under preliminary consideration.
On September 3, a similar bill was submitted to the State Duma by deputies of the Communist Party of the Russian Federation. They also noted that the abolition of pension indexation provoked the termination of the work of some pensioners and turned out to be economically unprofitable for the state. They estimated the cost of resuming the measure at 681.3 billion rubles.
In January 2021, the President of Russia Vladimir Putin I instructed the government to submit proposals on the indexation of pensions of working pensioners. In February, the Ministry of Labor announced that it had sent them to the Cabinet of Ministers.
On July 23, RIA Novosti, citing a source in the Russian Trilateral Commission for the Regulation of Social and Labor Relations, reported that the heads of the Ministry of Labor, the Ministry of Finance and the Ministry of Economic Development Anton Kotyakov, Anton Siluanov and Maxim Reshetnikov was instructed to work out the issue of including the indexation of pensions for working pensioners in the federal budget for 2022