In Reversal, Russia Declines to Abolish Pension System

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Early in 2015, several top Russian officials called for the abolition of the county’s traditional pension system in order to shift to a system that more resembles a savings account.

But Prime Minister Dmitry Medvedev said this week that the current pension system will remain in place.

From RAPSI:

The Russian Government has decided to keep in place pension savings, RIA Novosti reports on Thursday, citing Prime Minister Dmitry Medvedev.

Most experts and Russian citizens supported a decision to preserve pension savings, Medvedev said at the government meeting. Russia needs to develop a predictable pension system and that naturally, some of the system’s mechanisms must be upgraded and streamlined, according to him.

Medvedev instructed the Finance Ministry and the Ministry of Economic Development to submit proposals on balancing the budget, with due consideration for this decision. First Deputy Prime Minister Igor Shuvalov will oversee this process.

He also instructed the appropriate officials to draft proposals on the most cost-effective use of pension savings’ financial resources for economic growth purposes.

Over the last three years, Russia has frozen approximately $3 billion of its pension contributions. Most of the money has been diverted to plug holes in the general budget, or aid corporations hurt by Western sanctions.

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