Agreement on securing the rights of citizens – members of the CIS in the field of pensions was signed in 1992. In addition to Russia, it was signed by nine countries, namely Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Tajikistan, Turkmenistan, Uzbekistan and Ukraine.
According to the document, pensions for residents of these states are allocated taking into account all the years of service and earnings acquired on the territory of the USSR before 1992, as well as in the CIS countries since 1992. At the same time, a person is paid a pension by the state in which he constantly lives, even if he has a different nationality. Mutual agreements are not made between countries (unless provided by separate bilateral agreements).
Therefore, if an immigrant from the CIS receives a pension in Russia, his work in the CIS countries is considered as if he had been working in the Russian Federation all this time. When a pension is issued in Russia, its earnings in national currency are converted into rubles at the exchange rate on the date of the pension.
The draft law of withdrawal from the contract prepared by the Ministry of Labor and the Ministry of Foreign Affairs of Russia, transmits RBC with a link to a copy of the project. It is coordinated with the Ministry of Economic Development, Pension Fund, Ministry of Finance and is supported by the Head of the State Legal Department and the Accounts Chamber.
The explanatory note to the bill says that more and more immigrants from the CIS are coming to Russia, and the cost of paying them pensions is also increasing.
“When you’re under [соглашение] Citizens who do not have a minimum of work experience in the USSR or who have a minimum of work experience and do not contribute to the development of the country’s economy can already fall into its category, ”explained the authorities.
The regional principle of the treaty also implies an increase in the financial obligations of states, for example, where pensions are higher or the retirement age is lower.
The draft law says that the agreement successfully fulfills the task of taking into account the interests of this generation of citizens with work experience in the USSR. However, it was emphasized that 30 years have passed since the signing of the agreement and that in the countries participating in the agreement, the state pension system was transferred to the formation of pensions by paying insurance premiums. Thus, the provisions of the CIS treaty “no longer conform to the ideology and basic principles of pension systems”, “do not allow the citizens of these states to fully enjoy their pension rights when they retire.”
According to officials, withdrawing from the agreement will save up to 2.2 billion rubles. From the budget of the Pension Fund of Russia (PFR) for the period 2023-2025.
How will they calculate pensions in the CIS now?
Russia plans to terminate the agreement on January 1, 2023. Current retirees will not notice the change. Pensions allocated under the old rules will not be reviewed. But future retirees will receive payments in a different way.
Russia has already signed a multilateral agreement with the EAEU countries (Armenia, Belarus, Kazakhstan, Kyrgyzstan) and Tajikistan, in which pension costs are divided between states according to a proportional system. The duration of service acquired in the territory of the different Member States will be summarized, and each country will pay only its own share, according to the amount of pension rights acquired in its territory. Russia is negotiating with Moldova and Uzbekistan on the future payment of pensions.
Thus, in the current situation, only Ukraine’s position as a participant in the old agreement remains unclear. If it is not possible to conclude a bilateral agreement with him, pensions will be paid by default according to national legislation. When issuing a pension in Russia, work experience in Ukraine will be taken into account only if it was received before January 1, 1991.
“Several Ukrainians came to Russia for a long time and worked here officially, receiving higher salaries than in their homeland, and large insurance premiums were deducted from them. After the termination of the agreement on the pension rights of CIS citizens, Ukraine will no longer take into account the length of service acquired in Russia when calculating the pension [поскольку Россия перестанет передавать информацию из ПФР]”, – explained Alexander Safonov, a professor at the Finance University under the government.
As for LPR and DPR, social security issues for citizens of one party in the other party’s country shall be regulated by special agreements, in accordance with agreements of friendship, cooperation and mutual assistance.