Behind the pension crisis in Russia

By Greg Butterfield
September 1, 2018

According to Labor Minister Maxim Topilin, the government plan would slash the number of people eligible to receive pensions by almost 11 percent — 4.6 million people — by 2024. Officials claim this is not a death sentence for older workers already tottering on the edge of destitution, but rather an opportunity for new, higher paying jobs through professional retraining.

This refrain will sound familiar to many workers in the U.S. In fact, Medvedev, Topilin and other proponents of the plan are explicitly looking to the U.S., with its cuts in social programs and increased pressure on workers to delay retirement, despite the steep decline in long-term, well-paying jobs.

Russian workers aren’t fooled. Among the most popular signs at recent protests are “Pension in the grave” and “Be a patriot — kick the bucket before you get a pension.”

According to Oleg Babich of the Russian Confederation of Labor, by 2024 the economy would need to generate between 7 and 7.5 million jobs to accommodate both delayed retirements and young people entering the job market. “We have figures from the same Ministry of Labor that 300,000 jobs will be created next year,” said Babich. (SVpressa, July 19)

Others point out that the destruction of the institutions that supported workers in socialist times means the “reform” would have a massive impact on the whole working class, not just those approaching retirement age. The loss of affordable housing and quality, accessible health care means working families will face the same crises that those in the U.S. with senior parents and grandparents do.

Also, with the sharp decline in childcare options for workers, grandparents are increasingly called upon to watch young children while parents work or attend school.

Academics and activists agree that the reason the Putin-Medvedev regime is pushing the unpopular attack now is an impending deadline in 2022, when retiring workers would first begin drawing on a new Western-style, investment-based pension system introduced after the destruction of socialism.

These instruments have been ruthlessly looted for short-term gains by the oligarchs. If people continue to retire at the current rate, by 2024 the government will be unable to hide the shortfall or its causes. “It was not abstract funds that were plundered,” noted Dr. Nikita Krichevsky, chief researcher at the Institute of Economics of the Russian Academy of Sciences. “They plundered part of people’s salary that was deferred for many years for use in old age.” (SVpressa, July 19)

“Let’s be honest — the pension, even before its planned cancellation, was insultingly small,” says Anatoly Baranov, a secretary of the United Communist Party (OKP). “It’s impossible to live on it, and the ‘young’ pensioners are forced to somehow earn additional income. But this tiny pension is, in fact, a small acknowledgement that at 60 years old you can’t earn as much as at 30. …

“If the state is unable to fulfill its obligations to citizens of retirement age — then declare yourselves bankrupt! And we ourselves will take what we need from the stolen property. Give us back the factories and oil industries that were squeezed dry by the oligarchs.” (, July 19)

Or, as a woman protesting in Tver put it: “In China, thieving officials are taken in the streets and shot, and their property confiscated. We want that too.” (New York Times, Aug. 8)