The Russian government debates reforms to insurance pension payouts
The Russian administration is backing a draft law aimed at changing how insurance pensions are distributed. Authorities plan a favorable review of the proposal and are preparing to submit it through a collaboration between a State Duma deputy, Alexander Khinshtein, and a group of senators. The move signals a legislative effort to streamline pension payments and align them with new financial administration rules to improve efficiency and accountability across the system.
The bill, introduced to the State Duma in October, targets a segment of retirees who currently receive a cash pension. In practical terms, it would affect roughly 13 percent of those who now obtain cash-based payments, prompting discussions about how best to implement the change without disrupting beneficiaries’ livelihoods or adding unnecessary complexity to their routines.
Under the proposal, citizens would be allowed to deposit a pension into an account at a bank of their choosing. If cash payments are preferred, the recommended option would be delivery through the national postal service, creating a centralized channel for cash disbursements while keeping electronic deposits available through commercial banks. This model aims to balance flexibility with streamlined administration, reducing the administrative burden on the state while preserving convenient options for recipients.
Currently, the pension system offers three pathways for receiving an insurance pension: deposits into bank accounts via credit institutions, payments through postal agencies, and delivery through other specified delivery services. When cash distributions are involved, funds can be delivered directly to the home or collected at a designated delivery office. The multi-channel approach provides choice for beneficiaries but can complicate oversight and drive up costs for both the state and recipients, especially when cash handling and logistics are involved.
If the proposed norm is enacted, the number of channels could be reduced. Starting on April 1 of the following year, only two routes would remain viable: deposits to commercial banks and deliveries through federal postal service agencies. The second option would cover home delivery or post office pickup, as outlined in the accompanying note, simplifying the spectrum of delivery methods while preserving essential access to pensions for retirees living in remote or underserved areas.
In a separate development, on November 25 the Minister of Labor and Social Protection of the Russian Federation, Anton Kotyakov, announced that pensions for non-working retirees would be indexed at 4.8 percent starting January 1, 2023. It was also noted that this year featured a temporary recalculation of pensions, which resulted in a 10 percent increase beginning June 1. These adjustments reflect ongoing policy efforts to balance pension adequacy with fiscal sustainability, while the reform draft under discussion seeks to further consolidate and rationalize pension disbursement channels across the country. The broader context remains a push to harmonize pension mechanisms with contemporary financial governance, ensuring predictable benefits for retirees while supporting budget stability and long-term social protection goals.