Russia to Index Pensions by 7.3% for Working Pensioners Starting January 2025
In a significant policy shift, the Russian Social Fund has announced that pensions for working pensioners will be indexed by 7.3% starting January 1, 2025. This marks the first indexation for working pensioners since 2016, reflecting a long-awaited adjustment aimed at improving the financial well-being of this demographic. The decision was officially signed into law by President Vladimir Putin last summer, emphasizing the need for fairness and timely support for citizens of retirement age.
The indexation will apply to all pension recipients, regardless of their employment status. However, the increase will differ between those who continue to work and those who have retired. The Social Fund clarified that the recalculation will be based on the established pension amount, which considers all previous indexations, rather than the current payment amount. This means that working pensioners will see an increase based on what their pension would be if they were not employed, while those who retire will benefit from all missed indexations upon leaving the workforce.
Implications of the Pension Indexation
The announcement has been met with positive responses, as it aims to address the rising cost of living and inflation concerns. The government has retained the option to further increase pensions if the inflation rate exceeds the set indexation level. Svetlana Bessarab, a member of the State Duma Committee, highlighted the state's responsibility to ensure that pension increases align with the growth in prices for goods and services, stressing that neglecting this duty could lead to a decline in the quality of life for pensioners.
Additionally, the law also includes provisions for the indexation of maternity capital, which will also see a 7.3% increase, effective February 1, 2025. This adjustment will raise the payment amounts for families welcoming their first and second children, further supporting citizens during critical life stages. Overall, the indexation of pensions and maternity capital reflects a broader commitment by the Russian government to enhance social welfare and support for its aging population.
