San Francisco Chronicle (Sunday)
Pension plan hits key Putin demographic
MOSCOW — When 52-year old accountant Marina Grigoryeva was laid off this year, she figured that at least she would be eligible for a state pension in three years’ time. But new measures announced by President Vladimir Putin mean that Grigoryeva, who has been looking for a job for over six months, will have to wait eight years instead.
A planned hike in the retirement age yanks away the safety net for millions of Russians in their 50s, core Putin supporters who struggle to hold down a job, let alone find a new one, and have come to rely on pensions as a meager but secure source of income at a time of economic uncertainty.
“You can’t get by on the benefits at all,” said Grigoryeva, who has worked for the Moscow City Telephone Network for nearly 30 years. She is entitled to 5,000 rubles ($73) a month in unemployment benefits, which is half what the government says is the minimum subsistence level. And it’s only a tenth of the average salary in Moscow, where she lives.
A recent opinion poll shows Putin’s approval ratings crashed this summer following the announcement of the pension reform, while an increasing number of Russians say they are ready to take to the streets to protest it. The president even made a televised address to the nation to explain the need for a higher retirement age and announce some concessions.
Putin had initially tried to keep a distance from the politically sensitive proposal. It was announced instead by Prime Minister Dmitry Medvedev in June — on the day the World Cup kicked off in Russia.
The plan was initially to raise the pension age by eight years to 63 for women and five years to 65 for men by 2023, though the increase for women was eventually trimmed to five years.
The reform is Putin’s most unpopular move in more than a decade. A recent survey by the Levada pollster shows that 53 percent of Russians are ready to protest against the amendments and that 77 percent would vote against them at a referendum. The surveys were held in July and August, with a margin of error of 3.4 percentage points.
The outrage stems in part from the fact that life expectancy in Russia lags that in Europe or the United States, with the proposed pension age for men just two years below the life expectancy of 67. It is also due to the fact that Russians over 50 are finding it increasingly difficult to keep a job or find a new one.
For public finances, the hike in the retirement age was long overdue. As the workforce shrinks, the government spends more on pensions every year, earmarking 3.3 trillion rubles ($48 billion) in 2018, even more than on defense. Yevgeny Gontmakher, who served as a top adviser to Medvedev when he was president, says the proposed changes are a “big mistake” because they will sideline lower income Russians who rely on state pension as an important source of income.
“This is big for millions of Russian families,” he said. “All of a sudden these people will have lost nearly half of their (expected pension) incomes.”
In his televised address, Putin warned that without such a move, the pension system “would crack and eventually collapse.” He offered assurances that the state will take care of the over-50s, including a vague promise of jobs, and wrapped up his speech with: “I’m asking you to be understanding of this.”
The reform and Putin’s address became fodder for jokes and Internet memes. One shows a thug demanding money from a passer-by, who screams “But that’s a robbery!” To which the robber goes: “I’m asking you to be understanding of this.”
Nataliya Vasilyeva is an Associated Press writer.