Russia is set to implement significant reforms regarding the calculation of seniority for self-employed individuals and citizens who voluntarily contribute to the pension fund. This change, aimed at creating a unified system for calculating seniority, is expected to address existing inequalities in the current pension system.
At present, self-employed individuals and military pensioners can determine their insurance period based on the contributions they have made. However, for those who pay contributions on behalf of themselves or others, this mechanism has not been available, leading to disparities among different categories of payers. The proposed federal law seeks to rectify this issue by standardizing the approach to seniority calculation.
Starting in 2025, the minimum contribution required to establish a full year of seniority will be set at 59,241.6 rubles. If a citizen pays less than this amount, their seniority will be calculated proportionally to the contributions made. For instance, if an individual contributes 30,000 rubles in 2025, they will earn 0.494 pension coefficients and approximately six months and two days of insurance experience.
State Duma deputy Svetlana Bessarab commented on the reform, stating, "All categories of voluntarily insured individuals will have the opportunity to account for their work experience under unified rules. Citizens may face financial difficulties, which could hinder their ability to meet contribution obligations fully. Now they can be assured that even during temporary financial hardships, their efforts will be recognized." This statement highlights the reform's intent to provide equal conditions for all participants in the pension insurance system.
Currently, self-employed citizens are not mandated to pay insurance contributions for mandatory pension insurance. Those working solely as self-employed individuals do not automatically accrue seniority or pension points. To establish pension rights, they must make voluntary contributions to the Social Fund of Russia (SFR).
To begin making voluntary contributions, individuals need to submit an application to the SFR and register as a payer. The frequency of these payments can be determined independently; individuals can either pay the entire amount at once or split it into several payments throughout the year.
In order to qualify for an old-age insurance pension, three conditions must be met: a minimum of 15 years of insurance experience, at least 30 pension points, and reaching the retirement age (60 years for women and 65 years for men after the pension reform concludes in 2028).
If a self-employed person fails to accumulate the necessary seniority or points, they may still apply for a social old-age pension, which is granted five years later than the established retirement age. This provision ensures that even those who struggle to meet the new requirements have a safety net.
As the proposed reforms take shape, they have generated discussion among various stakeholders regarding their potential impact on the pension landscape in Russia. Advocates argue that these changes are necessary to create a fairer system that acknowledges the contributions of all workers, regardless of their employment status.
While the government aims to unify the rules and eliminate inequalities, there are concerns about how these reforms will be implemented and whether they will adequately address the financial realities faced by many citizens. The adjustments to the pension system come at a time when economic pressures are already affecting the ability of individuals to contribute fully to their pensions.
In summary, the proposed reforms represent a significant shift in how pension contributions and seniority are calculated for self-employed individuals and other voluntary contributors in Russia. As the country moves forward with these changes, the focus will remain on ensuring that all citizens can confidently build their pensions, even amid financial challenges.
