Stimulating desire to work longer
The document envisages pensions growing progressively if someone reaches the pensionable age and continues working (without drawing their pension):
— in the first year, pensioners will be able to receive an additional 6 percent of their earnings (taken for the calculation of pensions), added to their pension;
— the second year adds 8 percent — giving a total of 14 percent;
— for the third year, the pension rises by an additional 10 percent (24 percent in total);
— the fourth year adds 12 percent (36 percent in total);
— for the fifth and each subsequent year, pensions will rise by a further 14 percent of earnings (giving a total of 50 percent by the fifth year and 64 percent by the sixth).
According to previous legislation, those working beyond their pensionable years (without drawing their pension) received just 1 percent more on their earnings (as calculated for pensions) for each 2 full months of work.
Current pensioners, retired after the period stipulated by law, will also receive increased payments. According to the Presidential decree, in calculating pensions, state agencies will also take into account time when employees have failed to pay their required premiums into the pension fund. Each year of working experience will correspond to a percentage contribution to pensions, with various periods being worth varying amounts. The decree also establishes a common value for all periods whereby no pension contributions are made (including such periods in the calculation of earnings).
The Presidential Press Service notes that its payment of higher pensions for late retirement, as well as the unification of the value for periods where no contributions are made, should help reduce the number of those retiring at the earliest age, while raising the efficiency of public spending. The new law will apply to current workers paying their pension contributions.