Диссертация (1137741), страница 8
Текст из файла (страница 8)
Pension indexation by the inflation rate, gradual fall of replacementcoefficient.1. Permanent abandonment of indexation.2. Re-introduction of indexation from 2019.We consider two scenarios for economic growth rate: 1.5%, which we see as a potentiallevel under current conditions, and 3%, which is the goal of the government backed bystructural reforms.
The economic growth rate affects nominal pension spending indirectlythrough the size of indexation needed to maintain the current level of the replacementcoefficient. It depends on the nominal wage growth, which is different under different31According to the law the social contributions rate will return to 34% after 2019 from the current level of 30%.According to the Ministry of Finance estimates, Russia is characterized by a relatively low level ofadministration of social contributions (receipts as a percent of GDP relative to tax rate).3234assumptions.
Following the Ministry of Economic Development, we assume the nominalwage growth to be slightly under the nominal GDP growth. Other socio-economicassumptions listed above directly affect nominal pension spending. We assume inflation to beequal to 4% for the entire horizon for all scenarios in accordance with the Bank of Russiatarget. Pension expenditures in the current period are estimated according to the equation(1.2):=−1−1(1 + (1 − )),(1.1) = −1 (1 + (1 − )),−1(1.2)where are total retirement pension expenditures in the current period; and −1is the number of retirees at period and − 1; is the rate of pension indexation to the previous year, varies depending on thescenario; is the share of non-working retirees;−1is the growth rate of the number of retirees.1.3.4.
Scenario analysis of pension expenditures and policyimplicationsAccording to our estimates, in 2018 retirement pension expenditures will decrease by0.2 p.p. of GDP. With the adjustment on the one-time payoff in January 2017 they will stay at6.65% of GDP. This means that the impact of the indexation of pensions (by 3.7%) and of thegrowth of the number of retirees will be roughly compensated by the effect of nominal GDPgrowth backed by effects of recent pension reforms.In future years the dynamics of pension expenditures could differ significantlydepending on the assumptions concerning economic growth, demographic characteristics andfuture pension reforms.
Under the median demographic forecast, the economic growth of 3%should roughly stabilize the expenditures relative to GDP even without an increase in theretirement age and with the replacement coefficient staying at 35% (Figure 1.14). Switchingto economic growth of 1.5% under the same conditions would lead to an increase in pensionexpenditures of 0.4 p.p. of GDP by 2035. The total amount that can be saved during 20192035 caused by higher economic growth is 3.9 p.p. of GDP.3598growth at 1.5%, maintenance of the replacement coefficientgrowth at 3%, maintenance of the replacement coefficientgrowth at 1.5%, indexation by inflation rategrowth at 3%, indexation by inflation rate765432013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035Figure 1.14.
Pension spending in the median demographic forecast without anincrease in the retirement age, % of GDP*Dashed lines – scenarios with renewal of pension indexation for working retirees since 2019.Source: Russian Ministry of Economic development, Rosstat, authors’ calculations.An increase in the retirement age by half a year annually starting from 2019 will allowthe downward trajectory of pension expenditures to form, regardless of other assumptions.This will lower the amount of expenditures during 2018-2035 by 1.2-2.2 p.p. of GDP (Figure1.15).
Under the median demographic scenario with economic growth at 3% and themaintenance of the replacement coefficient at 35% without the pension indexation forworking retirees, retirement pension expenditures would be 1.9 p.p. of GDP lower by 2035 (to5.0% of GDP) because of the pension reform effect. The total amount that can be savedduring 2019-2035 caused by pension reform is equal to 19.6 p.p. of GDP. Therefore, anincrease of the retirement age alone would allow about half of the expected decrease in budgetrevenues to be offset in the long run for the maintenance of other expenditures of thebudgetary system at a stable level relative to GDP.3698growth at 1.5%, maintenance of the replacement coefficientgrowth at 3%, maintenance of the replacement coefficientgrowth at 1.5%, indexation by inflation rategrowth at 3%, indexation by inflation rate765432013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035Figure 1.15.
Pension spending in the median demographic forecast withan increase in the retirement age, % of GDP*Dashed lines – scenarios with renewal of pension indexation for working retirees since 2019.Source: Russian Ministry of Economic development, Rosstat, authors’ calculations.Additional saving of budget funds may come from pension indexation not aimed atmaintaining the replacement coefficient at 35%. As was shown in Subsection 2.3., a decreasein the coefficient to 30% should not violate the minimum set by ILO because of thedifferences in methodology behind the estimates. In the case of pension indexation by theinflation rate pension purchasing power will remain, but taking into account an assumedgrowth rate of real wages the replacement coefficient will decrease, which would lead to aworsening in the position of retirees compared to the working population.
According to ourestimates an indexation by the inflation rate would lead to the replacement coefficient beingequal to 23% by 2035 with economic growth at 3%, and to 28% with economic growth at1.5% coupled with slower wage growth (Figure 1.16).Under the median demographic scenario with economic growth at 3% and the generalincrease in the retirement age, pension indexation at the rate of inflation instead of to maintainthe replacement coefficient at 35% would allow budget expenditures on pensions to be lowedby an additional 1.7 p.p.
of GDP (to 3.3% of GDP). 33 In this case, the additional amountsaved for the budget from 2019-2035 would be equal to 18.0 p.p. of GDP (Figure 1.15).33Under the same conditions with economic growth at 1.5% pension indexation at the rate of inflation wouldallow to decrease pension expenditure to 4.3% of GDP.37383634323028262422Maintenance of the replacement coefficient at 35%Indexation by inflation rate, economic growth 1,5%Indexation by inflation rate, economic growth 3%2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035Figure 1.16. Replacement coefficient with different assumptions concerningrate of pension indexation and economic growth, %*The estimation for 2017 does not include the one-off pension payment in January.Source: Russian Ministry of Economic Development, Rosstat, authors’ calculations.The impact of an abolishment of pension indexation for working retirees on the budgetexpenditures depends positively on the number of retirees and the indexation rate.
The higherthe growth rate of the number of retirees is, and the higher the rate of indexation is (whichdepends, among other things, on economic growth), the higher the amount saved byabolishing pension indexation for working retirees will be. The least impact is seen in case ofan increase in the retirement age and indexation by the rate of inflation. On average the effectof the re-introduction of indexation of working retirees’ pensions on pension expenditures is0.1 p.p.
of GDP by 2035 and 1.5 p.p. of GDP for the whole period of 2019-2035. Theestimates of pension expenditures for 2035 in different scenarios are presented in Table 1.4.38Table 1.4. Expenditures on provision of retirement pensions in different scenarios, % of GDP2013Economic growth 3%Economic growth 1.5%With an increase of the Without an increase of With an increase of the Without an increase ofretirement agethe retirement ageretirement agethe retirement ageMaintena Indexatio Maintena Indexatio Maintena Indexatio Maintena Indexationce ofn bynce of RCn bynce of RCn bynce of RCn byRC34inflationinflationinflationinflation5.8820156.5820176.85 (6.65 –without the one-off payment in January)Median demographic forecast, pension indexation for working retirees20355.113.357.124.675.404.297.525.98Median demographic forecast, without pension indexation for working retirees20355.043.326.954.605.334.257.375.897.115.65Low demographic forecast, pension indexation for working retirees20354.813.166.734.425.084.04Low demographic forecast, without pension indexation for working retirees20354.743.136.574.355.024.016.975.578.206.52High demographic forecast, pension indexation for working retirees20355.663.727.765.105.984.76High demographic forecast, without pension indexation for working retirees20355.583.687.585.025.914.718.046.42Risks for the fiscal sustainability increase if we switch from the medium to the lowdemographic forecast.
![](https://s.studizba.com/z.php?f=/templates/si/i/noavatar.png&w=100&h=100&t=1"){kind=avatar}
