Recalculation and increase of pensions for working pensioners

Recalculation of pensions for working pensioners after dismissal in 2020" | Latest News Today

Pensions for working pensioners have been frozen since 2020. This means that those older Russians who have been working after retirement since 2020 or earlier still receive approximately the same pension as they did three years ago (it increased only due to a small recalculation in August each year).

Those who get a job as a pensioner later receive a pension at the level they had at the time of employment. It is known that the only option to get indexation is to quit your job.

How is the pension recalculated after the dismissal of a working pensioner in 2020, from what month after leaving work will the pensioner receive a higher payment.

Recalculation of pensions for working pensioners after dismissal in 2018. Changes in the conditions for recalculating pensions after dismissal in 2020

This year there was an important change in the rules for recalculating pensions after a person quits his job. Just as before, in this case the person’s pension payment is indexed taking into account all those annual increases that did not affect him. But - and this is an important point - in 2020 the increased pension is due earlier than it was in 2020.

Until the beginning of this year, a person began to receive an increased pension, taking into account indexations missed during the period of work, only in the third month after dismissal. Now he is entitled to such a pension starting from the next calendar month.

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True, there are some nuances that need to be remembered. Despite the fact that the right to recalculate a pension now arises the very next month after leaving work, it will be implemented, as last year, only in the third month. Let's figure out why this is happening and what has changed compared to previous years.

Recalculation of pensions for working pensioners after dismissal in 2018. Why will a pensioner who quits his job receive an increased pension only in the third month?

This is due to the peculiarities of reporting of Russian organizations to the Pension Fund and the intricacies of the functioning of the Fund itself.

To make it easier to understand what is happening, let's take a specific example.

Suppose pensioner Ivanov right now, in July 2020, understands that he can no longer work in retirement or is forced to resign by some other circumstances. He writes a letter of resignation from his job.

Then events develop like this:

• In July, pensioner Ivanov quits his job and receives a paycheck.
• In August, his former employer submits a monthly report to the Pension Fund about its employees. In this report, Ivanov continues to appear as an employee, even if he officially worked for only one day.
• In September, the company where pensioner Ivanov worked again submits a report to the Pension Fund, where Ivanov is no longer listed as an employee of the company. This is how the Pension Fund becomes aware of the dismissal of a working pensioner and his right to recalculation.
• In October, pensioner Ivanov will receive an increased pension, the amount of which will take into account all those indexations that have passed the pensioner by. In a word, this is the pension that citizen Ivanov would have received if there had been no freeze.

A pensioner who quits his job does not need to write any special statements. The Pension Fund will increase your pension automatically.

What is the difference from last year? The pension fund does not immediately learn about the dismissal of a pensioner, and does not immediately recalculate the pension associated with this. The increased payment is received by the pensioner only in the third month.

Attention!

The difference is that starting from 2020, the right to an increased pension in any case arises the very next month after leaving work.

Yes, the peculiarities of companies’ reporting to the Pension Fund of the Russian Federation are such that the Pension Fund will not be able to pay the indexed pension immediately. But pensioner Ivanov from our example in October will receive not only a higher pension for October, but also the difference between the old and new pension amounts for August and September. Just last year, pensioners after dismissal did not have such compensation for the first two months.

The reporting features described above also suggest to retirees that in some cases it is more profitable to quit at the end of one month rather than at the beginning of the next.

Even if a person worked or was listed as working only on the first day of a month, and was already fired on the second day, in any case he is included in the company’s report for that month as an employee.

This means that, in fact, he will have to wait a month longer for the recalculation of his pension after dismissal.

Recalculation of pensions for working pensioners after dismissal in 2018. What happens if a pensioner gets a job again after receiving a recalculation of his pension?

Nothing bad will happen. There was even an explanation on this topic from the Russian pension fund itself.

The meaning of the law on freezing pensions for working pensioners is that the pension does not increase while the person is working. If he quit and received a repayment, this does not deprive him of the right to get a job again. And the state has no right to take away the indexation received.

In particular, there will be no sanctions if the pensioner gets a job with the same employer in the same position from which he resigned.

Source

Pension recalculation in 2020

Before considering whether pensions will be recalculated for working pensioners in 2020, and on what principle the procedure is carried out, let us recall the general procedure for calculating payments.

Until 2002, it was enough to work 20-25 years (women/men) without interruption to be able to go on vacation. By continuing to work, the person increased his payments by 1% for an extra year. After the reform, an insurance system was introduced, according to which accruals are based on the amount of contributions. At the same time, the minimum length of experience is already only 10 years, but with a gradual increase in the standard to 15 years.

The exception is groups classified as military. They must have 20 years of service or 12.5 years (with mixed experience, if the total exceeds 25 years). Calculations are made based on their salaries for rank and position, increased due to service for additional years and reduced by an adjustment index. But they can also receive civil payments if they fulfill the conditions for working the required amount of time and collect the minimum points required for calculations.

If a person has practically never worked or his characteristics do not allow him to determine his pension based on legal criteria, he will receive a guaranteed minimum.

According to the law in 2020, pension recalculation for working pensioners occurs in three situations:

• Ratio growth until 2020.
• Increasing the coefficient assigned for each period counted into the length of service for the period after 2020 before the appointment of payments.
• Increasing your coefficient according to your personal account data in the insurance system, if initially they were not taken into account.

The amount of the old-age pension is more influenced by the amount of points. The procedure for accumulation through contributions and conversion into coefficients, according to the annually changing cost of one point.

Features and conditions

After going on vacation, everyone is entitled to a certain type of pension: insurance, state, social. If a citizen continues to work or officially gets a new job, the amount of his income must change.

This is due to quite reasonable reasons. The employer pays insurance premiums in the name of its elderly employee, as established by law for all employees. Thus, a certain amount is again collected in his personal account, which is converted into a pension. The pension fund is obliged to take into account new income in the amount of the pension. A recalculation of pensions for the year is assigned to working pensioners. At the end of each period, the PF again calculates the value taking into account new points when the situation changes.

Since employees have the right to choose, they can designate all transfers from the employer to form only the insurance part or send 6% to savings (of salary). They can be collected in a non-state pension fund and involve inheritance in the event of the death of the account owner. Based on the chosen method, a pensioner can accumulate for a year of labor service:

• Up to 1.875, when also creating a savings account;
• Up to 3: only for insurance.

If a pensioner conducts business in 2017, he can also increase the amount of his payments. To do this, you need to pay insurance premiums in your name yourself. If they are available, the Pension Fund will change the size of the pension.

Formula and algorithm for recalculation

Let's look at how pensions are recalculated in accordance with Federal Law No. 400 (Chapter 4). The formula is quite simple and provides the following algorithm:

The number of points accumulated per year must be multiplied by its cost. The latter value is set annually at the state level. In 2020 it was just over 70 rubles.

Having determined the bonus, it must be added to the existing pension amount.

Recalculation is carried out only on the designated day - August 1. The number of accumulated coefficients is taken into account for the state before January 1 of the current year. All subsequent points will be taken into account in the next period.

The pension recalculation formula is the same for all situations, for example, disability or loss of a breadwinner. In the case of the latter, of course, changes occur not annually, but once - only in the year after death. The algorithm is similar, but additional parameters are taken into account:

• The total length of service of the deceased is divided by 180 months.
• Divide the resulting value by the number of applicants (dependents).
• Divide the amount of accumulated points by the result obtained.
• Multiply by the cost of points this year.
• Add to the current pension amount.
• Only the data of the deceased himself is involved, and not the applicant for receiving payments.

Pension recalculation upon dismissal of a working pensioner is made for the next year, taking into account newly added points, the Russian Pension Fund will automatically calculate the pension amount

Recalculation of pensions for working pensioners from August 1

In Russia, there are two types of citizens who receive an old-age insurance (labor) pension, and the conditions for assigning, calculating and paying them pensions differ slightly - these are working and non-working pensioners.

• Non-workers are considered to be those who, after retirement, are not officially employed anywhere and, in addition to the above-mentioned pension provision, do not have other income.
• Working pensioners include citizens who work after reaching retirement age and at the same time receive old-age insurance.

The latter, starting from 2020, stopped indexing pension payments until the end of their working career, and instead their pension is increased on August 1 annually through recalculation.

In 2020, such recalculation affected about 23% of pensioners, with the maximum increase in pension amounting to 235.74 rubles.

In August 2020 (taking into account the cost of 1 pension point at 81.49 rubles), the pension of working citizens can be increased by a maximum of 244.47 rubles .

How does the pension amount change after August 1?

For officially employed citizens, employers pay insurance contributions to the Russian Pension Fund. Working pensioners are also no exception; for each of them the employer must transfer funds to the Pension Fund in full (22% for each).

Thus, throughout the year, certain amounts are formed on the individual account of insured working persons in the compulsory pension insurance system. In this regard, it was decided to recalculate annually .

In our country there is another type of pension provision - a funded pension. This type of payment, unlike insurance, is voluntary. Every year the funded pension is also subject to adjustment .

This is due to the monthly incoming funds to the personal account of the PFR management company or to the non-state pension fund (NPF). Money can be transferred both by employers (if citizens work officially and have chosen a funded pension) and by the insured persons (within the framework of the State Co-financing Program).

What is “recalculation of pension”?

Pension recalculation refers to a change in the amount of payment , in this case, the old-age insurance pension by the Pension Fund of the Russian Federation based on the insurance contributions that employers pay for their employees in the compulsory pension insurance system (MPI). This applies to citizens who receive old-age pension insurance, but at the same time continue to work both as employees and as self-employed people.

The self-employed population is considered to be citizens who are registered with the Pension Fund of Russia as lawyers, notaries, individual entrepreneurs and others engaged in private practice and pay contributions only “for themselves.”

Both pensioners can receive, in addition to the insurance pension, a funded pension if they made a choice in its favor at the time. The amount of this payment is also subject to recalculation (adjustment) on the following grounds:

• based on the results of investing pension savings in the personal account of the insured person;
• according to the amounts of income that were taken into account when assigning an urgent payment, funded pension or previous adjustment.

How is the pension of working pensioners recalculated?

For working pensioners, recalculation is carried out, as a rule, without application every year on August 1 .

The size of the insurance pension changes through an increase in the individual pension coefficient (IPC). This happens if a citizen works, and the insurance contributions made by the employer for him to the Pension Fund after January 1, 2020 were not taken into account when assigning old-age pensions.

Also, without an application from the pensioner, recalculation is performed when transferring from one type of insurance coverage to an old-age insurance pension. who have reached the age of 80 is also increased without application .

Citizen Klavdiya Stepanovna Kuznetsova turned 55 years old in September 2020. Having reached this age, which in our country is a retirement age for women, she applied for an old-age insurance pension. Also, Klavdiya Stepanovna can leave her job at any time, but due to personal circumstances, she is in no hurry to quit, so she continues to work in the same place to this day.

In this regard, during the work of pensioner Kuznetsova K.S. in the period from 01.01.

From 2017 to the present, the insurance contributions that her employer continued to make to the Pension Fund were not taken into account when assigning this security to the woman, and the IPC has increased during this time.

Important!

Therefore, the authorities of the Russian Pension Fund will recalculate Klavdiya Stepanovna on August 1, 2020, based on the paid contributions (not taken into account upon appointment) made by her employer. In this case, an application from the citizen is not required.

Thus, since Kuznetsova K.S. officially employed, she will receive an August recalculation, but her pension provision is not subject to planned indexation.

Application to the pension fund for pension recalculation

In some cases, recalculation can be performed based on an application from a pensioner. The size of the fixed payment to the insurance pension is changed if:

• disabled family members are dependent on the pensioner;
• the citizen acquires the necessary calendar or work experience in areas with difficult climatic conditions;
• the pensioner lives in a certain area (for example, in the Far North), etc.

The declarative recalculation is carried out from the first day of the next month, after which the payment itself occurs, taking into account the increase.

For working pensioners, recalculation will be made automatically based on contributions paid during the entire last year. Thus, insured persons do not need .

The procedure for recalculating pensions

Every year on the first of August, all working pensioners are recalculated their pensions, both insurance and funded.

This procedure is due to the fact that during their work, pensioners accumulate a certain amount in their individual personal account, which was not taken into account when assigning a pension.

These funds are recalculated and added to the citizen’s pension payment.

Every year in August, the payment is recalculated based on the data of contributions paid in the previous year .

Adjustment of insurance pension

On August 1, 2016, a non-declaration recalculation was carried out in the Russian Federation based on insurance premiums that were paid to the Pension Fund in 2020. Payments will increase for those citizens who received pension insurance in 2020 but continued to work.

If a pensioner left work in 2020, but worked and received support during 2017, all points accumulated over the past year will be recalculated according to the new rules (with the transfer of contributions into points) and the citizen’s pension will be increased.

In 2020, recalculation will be made on similar terms.

Pension recalculation formula

Recalculation of collateral is carried out according to a specially developed formula, which is prescribed in paragraph 3 of Article 18 of Federal Law No. 400 of December 28, 2013. In accordance with this point, the formula looks like this:

SPst = SPstp + (IPKi / K / KN) x SPK,

Where:

• SPst - old-age insurance payment;
• SPstp - the same payment (SPst), only before recalculation (as of July 31 of the year in which recalculation is carried out);
• IPKi - individual pension coefficient (as of January 1 of the year in which the recalculation is carried out);
• K is the coefficient described in Part 11 of Article 15 of the Law “On Insurance Pensions”, i.e. ratio of insurance period to 180 months;
• KN - number of dependents;
• SPK - the cost of one IPK.

However, the above formula is general and is suitable for recalculating all insurance pensions , including disability and survivor pensions.

When recalculating the old-age pension, the coefficients K and KN will be equal to one, respectively, using these values, it will look like this:

SPst = SPstp + (IPKi x SPK).

Maximum values ​​of the pension coefficient when recalculating

Clause 4 of Article 18 of Federal Law No. 400 of December 28, 2013 established the maximum IPC values . So for pensioners who have pension savings in the corresponding year:

• are not formed , that is, the citizen receives only one pension (insurance), the IPC is taken into account in the amount of no more than 3.0;
• are formed , that is, in addition to the main pension, the citizen also has a funded pension; the size of the IPC cannot exceed 1.875.

Therefore, despite the fact that the pensioner could have earned more, no more than the above amount .

Increase in funded pension

Just like insurance, savings annually on August 1 based on the basis of the funds contributed and the results of the investment . This happens according to the following formula:

NP = NPk + PNk / T,

Where:

• NP - funded pension;
• NPk — size of NP before adjustment;
• PNk - pension savings of the insured person;
• T is the number of months.

This formula is enshrined in the Legislation of the Russian Federation and is given in paragraph 2 of Article 8 of Federal Law No. 424 of December 28, 2013.

Pension recalculation on August 1, 2020

Not so long ago, the old-age insurance pension for working pensioners was no different from payments to non-workers. However, since 2016, the law of December 29 has been in force on the territory of the Russian Federation.

2015 No. 385, which suspends or supplements certain provisions of legislative acts of the Russian Federation.

In accordance with this law, for working citizens receiving old-age pensions, the indexation of the insurance pension and the fixed payment to it is temporarily suspended . This moratorium will continue in 2020.

Advice!

For working pensioners, starting from 2020, the indexation of pensions was cancelled, but not the recalculation - the annual adjustment of payments will be made in the same way as before.

Thus, on August 1, 2020, an automatic (non-declaration) recalculation of pension funds will take place and from this month the pension will be transferred taking into account the increase. Those.

in August, the recalculation will take into account those insurance premiums that were paid for pensioners in 2020.

Taking into account the fact that a maximum of 3 pension points are taken into account when recalculating, in 2020 pensioners will be able to receive an increase of no more than 244.47 rubles (with the cost of one point being 81.49 rubles).

Conclusion

In 2020, it was decided to suspend planned indexations for pensioners who continue to officially work as employees or as citizens from the self-employed category.

At the same time, the recalculation of pensions, which is carried out every year at the end of summer using specially developed and legally established formulas, remains and will be carried out both in 2020 and in subsequent years.

This allows the pensions of the working population of this category of recipients to increase , despite the temporary suspension of planned increases.

Fixed allowances

Recalculation of pensions for working pensioners from August 1, 2020, as well as before, is not the only opportunity to increase your payment. There are fixed amounts that are added to the existing pension, subject to certain conditions:

• Over 80 years old. Surcharges according to the tariffs in the law apply. Additionally, there is no need to write an application or complete any procedures; the increase is automatic.
• Changing the group when passing the ITU. Disabled people are required to systematically confirm the group, i.e. undergo examination and examination. Based on the results, the payment remains static, increases or decreases, depending on whether the group has been changed and in what direction.
• The pensioner now has or does not have dependents who were previously taken into account in the calculations. For registration, you need to provide an application in which you indicate all the information about relatives belonging to this category.
• The pensioner has changed his place of residence, taking into account which special increasing regional coefficients (Far North) begin or cease to apply.
• Recalculation of the pension upon dismissal of a working pensioner is carried out next year, taking into account the newly added points. There is no need to report absence of work to the Pension Fund. If there are no changes in the personal account, the pensioner is assigned the last established amount, which is subject to change only in connection with an increase in the value of the coefficient, during indexation or other reasons specified by law.

Cancellation of recalculation of pensions for working pensioners on August 1, 2017 on the basis of the Federal Law On Insurance Pensions

Increasing pensions for working and non-working pensioners from August 1, 2020: latest news

Yes, what can we say about pensioners, here are 4 thousand people who took out foreign currency mortgages, after the fall of the ruble exchange rate and an increase, thus, mortgages 2-3 times higher cannot make ends meet (by the way, about the conditions for providing mortgages to pensioners, you you can find out here + mortgage from Sberbank). The State Duma even has to pass a special law stating that such fluctuations in the exchange rate are force majeure circumstances that cannot be foreseen and that require assistance from the state to borrowers.

When we are talking about pensioners, then, even more so, when exchange rates fluctuate, which means when the price level changes, help is extremely necessary. This kind of help is called indexing.

Conditions for indexing

and the only purpose of indexation is to make up for the loss of pensions on the consumer basket due to the constantly growing rise in prices. Such replenishment is carried out only over the insurance part of the pension (old age), over the disability pension and over the survivor's pension.

The question about indexing arises:

• when prices rise by at least 6% over three months of a quarter, then indexation occurs 3 months after the quarter in which the threshold was exceeded, in other words, after a quarter;
• when in the first half of the year inflation was at least 6% - then indexation will be carried out 6 months later, from the 1st day of the next half-year, but this is provided that the indexation factor did not play a role due to “quarterly inflation”;
• when inflation was possibly less than 6% and when payments for “quarterly” or “semi-annual inflation” were not made - in this case, indexation is carried out on February 1.

The indexation coefficient is not defined by law; it is different each time, depending on the level of inflation and the capabilities of the state. The decision on indexation is made after a meeting of the Government of the Russian Federation. It is this that sets the final percentage of indexation, the starting date of its implementation and the period.

There is one more nuance. If the percentage of pension indexation for the year turns out to be less than the monthly increase in wages in the country, then after April 1 another indexation is carried out, taking this factor into account.

An important condition for indexing that cannot be ignored

And the last condition. The Pension Fund of Russia (PFR) is, to a certain extent, a commercial enterprise that invests funds collected from pensioners in various commercial initiatives that generate income. In general, pensions do not lie dead weight in the Fund, and this, in principle, is correct. Moreover, the Pension Fund is one of the most powerful financial institutions in the country.

So, the percentage of indexation cannot exceed the percentage of growth in Pension Fund income.

In other words, indexation is carried out at the expense of income received from the money of the pensioners themselves - every pensioner should understand this point very clearly.

Yes, the state takes care of its elderly fellow citizens, but only to the extent that it skillfully manages the money given to it by pensioners. This is how the return “pass” turns out.

Perhaps this answer may not seem very fair to some - as it is, my well-being depends on the ability of other people to conduct business for my money. But, in essence, this is so.

However, I think this is not the case when you want to take everything into your own hands.

Firstly, a pensioner no longer has the strength to move billions while managing a business at the very least.

And, secondly, those 20-50-year-old fellow citizens of pensioners who invest their money (they live on this, what can you do, I must admit), are quite qualified specialists, so that, at least at the state level, they trust.

Conditions for indexing “local significance”

The next indexation of pensions will begin on the first day of August 2020. But only non-working pensioners, those who receive the insurance portion of their monthly payments from the state for old age or disability, can apply for it.

“Non-working”, but who worked in 2016 and, in any case, stopped working no later than May 1, 2017.

Further, the amount of the bonus is strictly limited to 3 pension points.

One pension point in 2020 is 78 rubles 58 kopecks (in 2016 it was 74.27, read more).

Hence the conclusion - the maximum increase in any case in August 2017 will be no more than 235 rubles. 74 kopecks

Three points correspond to the average salary for the year of 24 thousand rubles. If it turned out more, then such a pensioner will still receive no more than “3 points.”

Attention!

In addition, the rule applies if a pensioner worked throughout 2016 and missed this year’s indexation by 4%. Then he quit before May 1, 2020, then his pension will be indexed twice: for 2016 - by 1.04 and for 2020 - by 1.058.

In other words, if the pension was 7844 rubles by August 1, and the average salary in 2016 was 25 thousand, then as a result the pension after recalculation and indexation will be:

7844.00 x 1.04 x 1.058 + 235.74 = 8630.31 + 235.74 = 8866.65 rubles

- more by 1022 rubles 65 kopecks.

Recalculation of pensions

The reason for recalculating pensions is a change in external circumstances that affect the amount of the pension. And this matter concerns each pensioner personally, whether working or not.

Among these circumstances:

1. Change of disability group.
2. A citizen reaches the age of 80 years.
3. Change in the number of persons receiving a labor pension upon loss of a breadwinner.
4. Changing the category of persons receiving a labor pension in the event of the loss of a breadwinner.
5. Achieving the required work experience in regions of the country with difficult working conditions - this is the Far North and regions equivalent in their difficult conditions to it.
6. If you continue to work in retirement, your length of service will increase.

The law also provides for other reasons for recalculation, for example, a simple error or inaccuracy in calculating accruals made by employees of the Pension Fund.

All documents that confirm the need for recalculation must be submitted to the Pension Fund branch at the place of residence.

The most common reason when the pension needs to be increased for a working pensioner is the past year of work. If a year has passed, it means that the pensioner’s work experience has increased, since the employer paid pension benefits.

As a matter of fact, the Pension Fund of Russia makes (should make) such recalculation automatically from August 1, having information about transfers made by the employer. At the same time, the pensioner still has the opportunity to independently contact the Fund with an application for the need for recalculation.

Recalculation is carried out according to the following formula:

SP = SS + PV / M, where

• SP – new pension amount (after recalculation);
• SS – previous pension amount;
• PV – the amount of pension contributions transferred to the Pension Fund;
• M – number of months of work (payments).

The amount of recalculation when changing the category of disability is made according to the same formula.

The formula for recalculating the survivor's pension is a little more complicated:

SP = SS + PVR / (M x P) / NK, where

• СС – pension amount on the last day of July;
• PVR - the pension of the deceased breadwinner, calculated, but which was not taken into account on the date of his death;
• M is the expected period of old-age pension payments;
• P – the quotient of the breadwinner’s length of service (in months) and the number “180” (as a constant reflecting the number of months over 15 years);
• NK - the number of disabled family members receiving a pension, the breadwinner who has passed away.

The active life position of a pensioner and his desire to work “directly” with the Pension Fund when recalculating his pension can yield positive results.

The fact is that refusals to carry out recalculation are possible. In this case, the Fund is obliged to notify the pensioner no later than 5 working days about the reasons for the impossibility of recalculation, explain the procedure for objecting to the decision and, of course, return all the documents provided.

We only draw attention to two circumstances when pensions are not recalculated by law:

1. If the pensioner is working and the survivor's pension is a survivor's pension, the fact is that these calculations are based on the pension contributions of the deceased person, and not the recipient himself.
2. If the pension comes from the Ministry of Defense, the Ministry of Internal Affairs and other similar organizations.

There is a separate discussion about the recalculation of the funded part of the pension. The state carries out this recalculation once every 3 years - the increased amount must be accrued from the very next month relative to the one in which 3 years expired.

In any case, errors in recalculation made by Pension Fund employees have neither a statute of limitations nor a deadline for execution. They must be corrected immediately when identified.

If a pensioner does not agree with the refusal to recalculate, he has the right to appeal to a higher branch of the Pension Fund or to the judicial authorities.

Recalculation of pensions from August 1, 2020 for working pensioners

About 15 million Russian pensioners continue to work in 2020. This is just under 40% of the total share of pensioners. Citizens are forced to work on pensions not only by the desire to help society, but also by the fairly low level of pension provision.

Its average amount at the end of 2020 was 14,400 rubles as an old-age payment and approximately 9,000 rubles as a social benefit. In 2018, the average pension is also 14,400 rubles.

The minimum pension in 2020 is 8,700 rubles.

deprived of annual indexation since 2020 . We will consider below how their pension payment increases.

Indexation of pensions for employed pensioners: Latest news 2020

Pension payments, as social benefits to compensate for lost earnings, imply annual indexation. This means its increase by the growth of annual inflation . Indexing allows you to keep the purchasing power of a pension at the same level despite the depreciation of the currency and the constant rise in prices for products and services.

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This means that the amount of pension benefits in different years allows the pensioner to maintain his usual consumer basket.

Due to the difficult economic situation in Russia, the Government is taking measures to significantly save the state budget.

In particular, the indexation of pensions for those pensioners who continue to work was frozen.

This was justified by the fact that a working person of retirement age has an additional source of income, and the pension payment for him is an additional source of support.

The abolition of indexation for workers was established in 2020 and, as of July 2020, indexation of pensions for working pensioners is frozen until 2020.

On June 27, 2020, at a meeting of the Federation Council, Finance Minister Anton Siluanov confirmed that the indexation of pensions for working pensioners will not be included in the budget of the new pension reform of 2019. This means that until 2020, working pensioners should not expect an increase or increase in their pension.

If a citizen leaves work, then his pension benefit begins not only to be indexed according to the plan, but also the payment for the entire period of employment is recalculated.

However, an increase in payments to workers should be expected annually thanks to such a concept as the recalculation of pensions from August 1 .

Amount and procedure for recalculating pensions from August 1, 2020

The recalculation of pensions on August 1, 2020 will allow those citizens who continue to:

• Officially work;
• Transfer funds to the Pension Fund;
• Accumulate pension points.

How much will this recalculation increase your pension? Pension legislation sets limits on the number of pension points that will be taken into account during recalculation. In 2020, this value will remain at the same level – 3 points .

Citizens who receive an average of about 24,000 rubles monthly can add this amount to their pension coefficient savings. In a situation where a pensioner earns more, only 3 maximum points will still be credited.

The amount of increase that should be expected is calculated using the formula:

PC = KB * SB , in which:

• PC – increase in pension according to recalculation;
• KB – the number of points added based on the results of a year of work;
• SB - the cost of a point, established by the state annually.

In 2020, one pension coefficient costs 78.58 rubles .

Accordingly, we multiply 81.49 by three points and get that the maximum increase in pension benefits for working pensioners will be 235.74 rubles .

The recalculation procedure is an automatic process that does not require applications to the Pension Fund . All changes to payments will be made automatically from August 1. Workers of retirement age will begin to receive a new pension in September.

Indexation of pensions after dismissal in 2020

In the event of dismissal, benefits for the pensioner must be reviewed. This is evidenced by Federal Law No. 385 , which includes features of increasing the insurance pension, and Federal Law No. 400 “On insurance pensions” .

A revision of the amount of the payment implies an increase in it by the amount of all missed indexations due to the citizen’s employment. The final amount will also be affected by:

• Total work experience.
• Number of collected pension coefficients.

There are some nuances in the design of recalculation :

1. If the work activity was completed before March 31, then in order to timely change the amount of payment, the citizen must independently contact the Pension Fund.
2. After this period, the pension organization receives information about the end of citizens’ labor activity in an automated manner.

In both cases, you need to collect some documents :

• Application for recalculation.
• A copy of your passport.
• A copy of the work book.

If after recalculation the person decides to return to work, the payment amount will remain at the current level. However, its indexation will be frozen again.

For individuals who plan to continue working after reaching retirement age, it makes sense to calculate their benefits in connection with delaying retirement. In this case, premium rates come into play. With a 5-year term, the size will increase by 85% , which is significantly more than possible increases due to indexation.

Example for pensions from August 1, 2020

Antonina Vasilievna is a pensioner, but continues to work as an employee of the city library. Her pension is not indexed, but annually on August 1 it is recalculated taking into account data from the last working year.

The average monthly salary of a woman is 15.6 thousand rubles. Over the course of a year, she managed to accumulate 1.95 pension coefficients. Let's calculate the expected increase in a woman's pension:

PC = 1.95 * 78.58 = 153.2 rubles. :

The pension, taking into account the August increase in 2020, is 8,642 rubles ;

Conclusion

1. Indexation of pension payments for pensioners who continue to work is presumably suspended until 2020;
2. The legislation provides for this category of citizens an annual recalculation of payments based on the results of contributions to the Pension Fund for the previous year.
   It is scheduled for August 1;
3. From August 1, 2018, pensions for working pensioners will increase by an amount equal to the number of deferred pension coefficients multiplied by their value; The maximum increase will be 235.74 rubles.
4. Calculations show that the increase in pensions for working citizens cannot compare in growth rates with the indexation of payments for pensioners who left the working path.

The most popular questions and answers to them regarding pensions from August 1

Question : Good afternoon! I am a pensioner, I am thinking about opening my own small business as an individual entrepreneur . I’m not working now, and my pension is indexed. What will happen when I open my own business - will indexation continue? What benefits does the state give to retired people who run their own business?

Answer : Hello! The opening of an individual entrepreneur is related to work, then, due to the current situation, the indexation of pension payments for you will be suspended . The pension will increase only based on the results of the August recalculation, which takes into account the number of pension coefficients accumulated over the year.

There are no benefits provided for pensioners opening individual entrepreneurs in the Russian Federation. It is important for you to understand that you will independently transfer contributions to the Pension Fund for yourself. It will also be necessary to make annual contributions to the Health Insurance Fund.

At the same time, there are no concessions for retired people when doing business. If your business fails, you will have to answer for your debts in accordance with the law, that is, with your own property.

Opening a business in retirement makes sense if you are well versed in the field in which you plan to open a company and will receive a stable income from this organization.

List of laws

• Federal Law No. 385 dated December 29, 2015
• Federal Law No. 400 “On Insurance Pensions”

• Moscow and region:
• St. Petersburg and region:
• Russia:

Will there be indexation of pensions for working pensioners in 2020?

In accordance with Article 7 of Law No. 385-FZ of December 29, 2015, the Government introduced a moratorium on the indexation of pensions for working pensioners from 2020. As a result, for this category of citizens the size of the fixed payment to the insurance pension and the cost of one pension coefficient (IPC) are not indexed, as is provided for non-working pensioners.

Despite repeated attempts by State Duma deputies to return to the usual indexation procedure for working pensioners, they have not yet returned to discuss this issue at the legislative level. The final position of the Government on the issue of indexation of pensions for working pensioners was voiced by the Minister of Finance and First Deputy Prime Minister Anton Siluanov.

The Government considers the adopted concept in relation to this category of pensioners fair for the following reasons:

• Even without indexation, the incomes of working pensioners also grow annually due to economic recovery after the crisis and rising wages.
  For example, according to Rosstat, there is an increase in wages. As the Government notes, the growth rate of income of working citizens significantly exceeds the growth of income of non-working pensioners, whose pensions are indexed by only 3-4% per year.
• All missed indexation during the period of employment will be taken into account upon dismissal in the final pension amount.

Based on the above, the Cabinet of Ministers believes that it is inappropriate to change the indexation rules adopted in 2020, since the main task of the Government is to ensure a high growth rate of income for the population as a whole. For employed pensioners, it is carried out in full due to the increase in wages, which has been noted by the state statistics service in recent years.

However, the existing order may change in relation to one category of citizens. In 2020, D. Medvedev instructed the Ministry of Labor to calculate the economic effect of the return of indexation

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working disabled people

. It is worth noting that no decision has been made on this issue yet.

Opposition parties in the State Duma have repeatedly tried to restore the “frozen” indexation for this category of citizens, for which several bills were prepared and submitted for consideration:

1. Bill No. 294971-7 from deputies of the Communist Party faction (introduced to the State Duma in October 2020), which proposed restoring the indexation of payments to working citizens from February 1, 2020.
2. Deputies from A Just Russia in December 2020 proposed their draft law No. 340074-7, which proposed not only indexation, but also payment to citizens of all lost funds during such a moratorium.
3. A similar bill from the LDPR faction No. 362896-7 was introduced in January 2020 and proposed lifting the moratorium on indexation starting July 1, 2020.

https://www.youtube.com/watch?v=ytcopyrightru

Unfortunately, bills to lift the moratorium on indexation of pensions for working pensioners have not been adopted. Please note that within the framework of the planned period for 2019-2024. The pension reform does not plan to change this approach either.

For all proposed bills, consideration was postponed indefinitely, and the conclusion of the Legal Department of the State Duma contained a negative review. In particular, it was noted that the adoption of such a law:

• first of all, it will require additional expenses that were not initially included in the budget (and the main goal of adopting the relevant amendments is precisely to save budget funds and reduce the Pension Fund deficit);
• will violate the existing “concept for the development of the Russian pension system,” which involves indexing pensions only for non-working pensioners;
• will violate the principle of social justice and somehow infringe on the rights of citizens who already receive pensions.

In 2020, in light of the economic crisis and budget deficit, the government adopted Federal Law No. 385, which prescribes the abolition of indexation of pension payments for employed pensioners. It, in particular, indicated that there is no need to index pensions for working pensioners, since they are able to independently provide for their subsistence level.

After this, no obstacles to its cancellation are seen. However, it is possible that the freeze on indexation will continue indefinitely, as has already happened with funded pension contributions. Experts' forecasts on this matter are diametrically opposed, and the possibility of repealing Law No. 385 depends only on the economic situation in the country.