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Putin seen as “off-handed” in pension row

RUSSIA - President Vladimir Putin and reformers should show “a little respect” for pensioners as they changes the country’s pension system, an economist who has studied the Russian pension regime says.

Professor Elsa Fornero, who has written a World Bank-sponsored report on Russia, told IPE: “I generally say it is easy to criticise those who try to change things, but in this case I think changes must show a little respect for those who have had a hard life and find themselves with very little.”

“I get the impression president Putin is being rather off-handed” she said.

Fornero’s comments follow a wave of protests by Russian pensioners. As many as 10,000 people gathered on Saturday in St. Petersburg to voice concern about changes and welfare cuts, which are estimated to affect more than 30 million pensioners, invalids and war veterans.

Further protests are expected in the next few days.

Fornero, who also heads the Center for Research on Pensions and Welfare Policies, CeRP, said she understood the government’s aim to develop a pension industry.

She added, however, that retired workers must face small, badly indexed pensions, often handled by a slow bureaucracy.

She said that as the government worked on long-term changes, it was not so focused on short-term problems.

A far-reaching reform would need a better, more accurate bureaucracy, close and thorough supervision of the development of the pension market that would “build confidence”. She also called for better indexation rules.

Fornero also spoke against the suggestions to raise the retirement age as hinted at last October by Gennady Batanov, the Russian Pension Fund Chairman. He spoke then of a maximum of an increase up to five years.

The Russian press responded to Batanov’s suggestion, pointing out that the average life expectancy for men is around 60 years and currently most men retire at 60. Women tend to retire at 55.

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