What affects pension amounts?
The law names several types of pensions. It depends on the basis of social support (old age, illness, etc.), the performance of special labor functions, incl. state The pensioner must know the grounds for the right to a pension and the conditions under which the Pension Fund will award a pension. After all, it is he who makes the choice of pension. And the main criterion, of course, is the size of the pension.
Military pensions, pensions of the Ministry of Internal Affairs and other law enforcement agencies are calculated according to a special formula. Based on the monetary maintenance of such persons. Social pension is associated with the lack of pensionable service (both full and partial). Its size is determined by law. And it does not depend on any factors that have developed during the life of the pensioner.
For a long time in the Russian Federation, the size of labor pensions did not depend on length of service or income. As of January 1, 2020, everything has changed. The new procedure for calculating pensions largely depends on the size of the citizen’s official salary throughout his life. And also on the length of insurance coverage and retirement age. In Russia, more than 80% of the population receives an old-age pension.
About valorization in detail and with examples
- A man who, as of January 1, 2002, has a total work experience of 42 years, including 40 years of “union” experience, has an average salary that exceeds the average salary in the country for the same period by 1.3, the size of his labor pension will increase by 1827.69 rubles. Calculation conditions:
- Year of birth: 1931
- Duration of insurance (general labor) length of service - 42 years
- including until 01/01/2002 - 42 years
- including until 01/01/1991 - 40 years
- Duration of insurance period after 01/01/2002 - 0 years
- The ratio of the average monthly earnings of the insured person to the average monthly salary in the country is 1.3
- taken into account during conversion - 1.2
- The amount of the insurance part of the old-age labor pension as of December 31, 2009 is RUB 3,655.37.
- The basic amount of old-age labor pension as of December 31, 2009 is 2,562 rubles.
- Calculation of the pension amount taking into account valorization: The size of the insurance part of the old-age labor pension as of 01/01/2010 (taking into account valorization): 5483.06 + 2562 = 8045.06 rubles, where 2562 is the fixed base amount of the insurance part of the old-age labor pension.
Valorization coefficient as of 01/01/2010: 0.5 (0.1 + 0.4) Calculation of valorization of the PKK: - Seniority coefficient as of 01/01/2002: 0.55+0.17 = 0.72
- Estimated amount of labor pension: 0.72 x 1.2 x 1671 = 1443.74 rubles.
- PC as of 01/01/2002: (1443.74 - 450) x 144 = 143098.56 rubles.
- Increase in pension due to valorization: (143098.56 * 0.5 * 3.6784): 144 = 1827.69 rubles, where 3.6784 is the total indexation coefficient of the estimated pension capital until 01/01/2010.
Year of initial pension assignment: 1991
Calculation conditions:
- Year of birth: 1949
Initial pension assignment in 2004
- including until 01.01.2002 - 29 years
- taken into account during conversion - 1.2
Valorization coefficient as of 01/01/2010: 0.31 (0.1 + 0.21) Calculation of valorization of the PKK:
Basic concepts used in calculations
Conversion of pension rights was carried out in 2002 for all pensioners who retired before 2002 and those who started working before 2002. In order to transfer pension rights into capital, it was necessary to calculate the conditional amount of the pension corresponding to the amount of rights that the person acquired while working before 2002. That is, determine the estimated amount of the pension. How was he counted? The length of service coefficient is taken - this is the work experience that was developed before 2002, depending on its duration the percentage was determined. The percentage could be from 0.55 to 0.75. For example, if, when assigning an old-age labor pension upon reaching the generally established retirement age, a man had 40 years of total work experience (before 01/01/2002), then his length of service coefficient is 0.55 (for 25 years of total total work experience) + 15 (for every year over 25 years).
The length of service coefficient is multiplied by the ratio of the average monthly earnings of the insured person either for 2000-2001 according to personalized records, or for any 5 consecutive years throughout the entire working life to the average monthly salary in the country for the same period (not more than 1.2 is taken into account - for except in cases provided for by pension legislation). All this is multiplied by 1,671 rubles (the average monthly salary in the Russian Federation as of the third quarter of 2001).
If, when determining the estimated amount of the old-age labor pension, the insured person has incomplete total work experience, then the amount of the estimated pension capital is determined based on the amount of the estimated pension capital with full total work experience, which is divided by the number of months of the full total work experience and multiplied by the number of months of actual total work experience. 0.55 - if the experience was 25 years, plus a percentage for each year in excess of 25, but not more than 75%. If the length of service was less than 25 years, the pension amount was subsequently truncated in proportion to this length of service. The length of service coefficient was multiplied by the earnings ratio either for 2000-2001 according to personalized records, or for any 5 consecutive years throughout the entire working life.
This earnings, personal average monthly earnings, were correlated with the average salary in the country, it was determined whether it was equal to the average earnings in the country at that time, was higher or lower. The third component of the conversion: all this was multiplied by 1671 rubles. 1671 rubles is the average monthly salary in the Russian Federation as of the 3rd quarter of 2001. The assessment of pension rights by converting them into estimated pension capital was carried out according to the formula:
PC = (RP-warhead) x T, where
- PC - the amount of the estimated pension capital;
- RP - the estimated size of the labor pension;
- BC - the amount of the basic part of the labor pension as of January 1, 2002 (450 rubles per month);
- T is the expected period of payment of the old-age labor pension.
The estimated size of the labor pension is determined for men with a total work experience of at least 25 years, and for women with a total work experience of at least 20 years, according to the formula:
RP = SK x ZR/ZP x SZP, where
- ZR - the average monthly earnings of the insured person for 2000 - 2001 according to individual (personalized) records in the compulsory pension insurance system or for any 60 consecutive months on the basis of documents issued in the prescribed manner by the relevant employers or state (municipal) bodies;
- ZP - average monthly salary in the Russian Federation for the same period;
- SWP - average monthly wage in the Russian Federation for the period from July 1 to September 30, 2001;
- SC - length of service coefficient, which for insured persons is 0.55 and increases by 0.01 for each full year of total work experience in excess of the duration specified in this paragraph, but not more than by 0.20.
The ratio of the average monthly earnings of the insured person to the average monthly salary in the Russian Federation (ZR/ZP) is taken into account in an amount not exceeding 1.2. The expected period of payment of an old-age labor pension is an indicator calculated on the basis of data from the federal executive statistical body and used to determine the insurance part of the labor pension. The expected payment period was determined to be 19 years, but this value will only apply starting from 2014, and before that, from 2002, starting from a period of 12 years, there is a smooth transition to 19 years, adding first six months, then per year until age 19.
SCH is the insurance part of the labor pension. The size of the insurance part of the labor pension (SP) depends on the size of the estimated pension capital of the insured person, formed by converting pension rights acquired by the insured person before 01/01/2002 into the estimated pension capital, and by recording on the individual personal account of the insured person in the mandatory system pension insurance insurance contributions to the Pension Fund for the insured person from 01.01.2002.
Insurance length of service is the total duration of periods of work and (or) other activities taken into account when determining the right to a labor pension, during which insurance contributions were paid to the Pension Fund of the Russian Federation, as well as other periods counted as insurance length of service. The size of the insurance part of the old-age labor pension is determined by the formula: SC = PC/T + B, where
- SC - the insurance part of the old-age labor pension; old-age pension;
- T - the number of months of the expected period for payment of an old-age labor pension, used to calculate the insurance part of the specified pension, amounting to 19 years (228 months).
FBI (Fixed Basic Amount) - from January 1, 2010, the basic part of the pension will transfer to the insurance part in the form of a fixed basic amount. The fixed amount corresponds to the size of the basic parts of the labor pension established as of December 31, 2009, depending on the category of the pensioner and the type of pension.
Based on materials from the Pension Fund website
Old age pension amounts
The formula for calculating the old-age pension looks like the sum of the values:
- fixed payment (multiplied by the bonus coefficient for later retirement, including the right to early retirement)
- individual pension coefficient (IPC) multiplied by the cost of 1 pension coefficient.
Of course, after reading this formula, an ordinary citizen who has not worked in the Pension Fund will have more questions than answers. Here you can do the following. Use the pension calculator on the website of the Russian Pension Fund. Submit a written request to the specialists of this body. Or you can study the publication on the website (calculation formula) and ask additional questions to the duty lawyer.
The procedure for calculating the accumulative part
Citizens born in 1967 have the right to form a funded portion. Every month the employer transfers 22% of the total official (white) salary to the Pension Fund.
The funded part allows you to receive additional income in the form of pension contributions. To do this, you must select a Non-State Pension Fund by the end of 2015. The right to receive funded pensions can be obtained through personal application.
Pension points for calculating pensions
Each year of a citizen’s work activity is calculated in certain pension points. But only on condition that the employer makes contributions to the Pension Fund. Higher wages and, accordingly, higher deductions. Therefore, the annual IPC is higher.
The size of the pension also depends on the choice of pension provision option: pensions can be not only insurance, but also funded. Citizens themselves chose whether to keep their funded pension. Or transfer it to the insurance company. When forming only the insurance part, the employer contributes 16% of the salary to it. When forming a cumulative account – 10%.
The maximum points are limited. And this indicator is established by law for each year. From 2021 it will be 10 – for those who form only the insurance part of the pension. And 6.25 for those who chose the funded part of the pension.
A citizen can find out how many points the Pension Fund has accrued for a particular year of work on the official website of the Pension Fund. To do this you will need to log into your personal account. Please note that a number of periods have a fixed IPC size. For example, the period of being on leave for a child, military service, etc. set at 1.8 (3.6 for the second child, 5.4 for the third and others).
The IPC was introduced on January 1, 2015. How to evaluate the years of work before this date in points? All work before 2020 was converted into pension points. And a person can find information in his personal account on the Pension Fund website. Or by personally contacting this body.
The cost of 1 pension coefficient from 2020 is established by law. Each year it increases slightly. The indexing procedure for this indicator has also changed (applicable from 2025).
The fixed payment for calculating the insurance pension is established by law. It is subject to indexation from February 1 of each year (the Government has the right to index it again from April 1).
Insurance experience as one of the conditions for pension payment
The insurance period is defined as the sum of the periods of work for which pension contributions were paid. In addition to the terms of employment, the length of service includes:
- years of military service;
- periods of temporary disability;
- parental leave for up to one and a half years, with a limit of no more than 6 years in total;
- time of receipt of payment in case of unemployment;
- the period of detention of innocent citizens;
- the period of time required to care for a disabled person of group 1, a person over 80 years of age;
The specified periods are included in the length of service only if they were preceded and followed by work activity.
The duration of the insurance period is calculated using the calendar method. Work intervals are confirmed based on personalized accounting data. If the accounting information is insufficient, additional documents may be required:
- employment history;
- written employment or civil contract;
- copyright or license agreement.
The procedure for determining the size of a disability pension
The right to receive a disability insurance pension belongs to those persons who have at least 1 day of insurance experience. Otherwise, the applicant must apply for the appropriate social pension. For this category of citizens, a monthly cash payment is established, which is received when choosing any type of pension.
The procedure for calculating the amount of a disability pension is similar to the calculation of an old-age insurance pension. Fixed payment and IPC multiplied by the cost of 1 coefficient on the day the pension was assigned (taking into account the increasing coefficient for each indicator). The annual IPC for disabled people is calculated using coefficients.
The fixed payment depends on the disability group and the presence of dependents. Its current size can be found on the Pension Fund website.
Regulatory framework
Russian legislation has a list of regulations that directly relate to the appointment and payment of state return benefits. The main ones are the following:
- Federal Law No. 400 “On Insurance Pensions” dated December 28, 2013;
- Federal Law No. 166 “On pension provision” dated December 15, 2001;
- Federal Law No. 385 “On suspension of certain provisions of legislative acts of the Russian Federation, amendments to certain legislative acts of the Russian Federation and features of increasing insurance compensation, fixed payment to insurance benefits and social pensions” dated December 29, 2020.
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The procedure for determining the size of a survivor's pension
The amount of a survivor's pension depends on the specific life circumstances of the person entitled to receive such a pension. As a general rule, a formula identical to the calculation of the old-age labor pension applies. But:
- for a child who has lost both parents, the IPC for calculation is determined as the sum of such indicators of both of his parents;
- for the child of a deceased single mother - the IPC is doubled;
- pension recipients, when on the day of death the breadwinner was granted a labor pension for old age or disability, are given the right to choose the calculation formula (Article 15 of the Law).
There are differences in calculating a survivor's pension for a child who is already a recipient of such a pension due to the death of one parent whose second parent has died, incl. is a recipient of an old-age pension.
Thus, it is quite difficult to determine the amount of a pension on your own, but if you disagree, a citizen always has the opportunity to go to court or file a complaint with a government agency.
