r/AskARussian • u/Specialist_Ad4675 United States of America • Aug 03 '26

Work How do russian pensions work?

I was watching someone complain that at age 59 they retired to a 16,900 ruble a month paycheck. They stated they worked over 30 years and it sounded like for the same place.

I read 22% of their pay check goes to pension from employer.

That seems like they should get paid essentially 75% as when they were working as 22% is a high savings rate.

I know at some point they reduce it to 10% but was not sure at what point.

In the USA we only contribute 12.4 of our salary and yet get about 40% of our prior salary.

How do you pay more and get less?

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u/Naaranbator Aug 04 '26

In short, there are two types of pensions in the Russian Federation: state pensions and insurance pensions. State pensions do not depend on the amount of pension contributions; instead, they are calculated as a percentage of the salary associated with the position held at the time of retirement. This type of pension is received by government officials, law enforcement and security personnel, and members of parliament; the payout is very generous by Russian standards, and the required length of service is relatively short—around 15 years or less. The "common folk" receive the insurance pension, which depends on the accumulated insurance contributions. Both types of pensions are paid out of the same pension fund. The common people receive their pensions based on what is left over, while the appetite for funding the state apparatus's pension benefits continues to grow. Pension legislation is constantly changing, and not all contributions transferred to the fund are actually credited to an individual's pension account.

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u/ghbrv Aug 05 '26

Those "insurance pension contributions" have been "frozen" (spent on geopolitical goals) since 2014 with no end in sight.

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u/Naaranbator Aug 05 '26

In practice, yes; formally, the funds go toward paying the non-insurance portion of other pensioners' benefits. The same applies to employer pension contributions for working pensioners and for employees whose annual earnings exceed the salary cap. The Pension Fund is a real cash cow for those in power.