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State Duma proposed returning indexation to working retirees

State Duma proposed returning indexation to working retirees

Member of the Federation Council Vasily Ikonnikov introduced to the State Duma a bill on restoring indexation of insurance pensions to working pensioners. The senator offers to do this from this year.

The mechanism worked until 2016, however, due to the high level of the federal budget deficit, indexation had to be abandoned. Author bill in an explanatory note to the document, he notes that there are no prerequisites for maintaining this norm - the federal budget surplus in 2020 is expected to amount to 876,1 billion rubles, the volume of liquid assets in the National Welfare Fund this year will exceed 7% of GDP.

The senator notes that according to the monitoring of the Ministry of Labor, due to the abolition of the indexation of pensions, the number of working pensioners paying payroll taxes fell from 15,3 million to 9,7 million people. Mostly they went into the field of shadow employment, which is why the budget loses about 300 billion rubles a year in the form of an unpaid tax on personal income.

To restore the indexation mechanism, it will require an additional 368,5 billion rubles in 2020, with a gradual increase in subsequent periods. Ikonnikov notes that the net financial effect from the cessation of indexation turned out to be negative, therefore its preservation is impractical. The senator also said that the lack of indexation is unfair to working pensioners, since they counted on the future payment of the insurance pension, regularly paying insurance premiums.

The Russian government did not support the initiative, as it found flaws in the financial and economic justification of the bill. Now the fate of the document should decide the State Duma.

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