Putin backs bill on reducing accumulative part of pensions, says it should take effect in 2014

Russian President Vladimir Putin supports a bill drafted by State Duma deputies on reducing the deductions for the accumulative part of pensions to 2% from the current 6% but considers it necessary to postpone the bill's enactment until Jan. 1, 2014.

"I believe the bill proposed by the deputies could be adopted, but its entry into force should be postponed until January 1, 2014," Putin said at a conference dealing with a pension reform.

Moreover, Putin said he deems it necessary for people wishing to keep their pension money in the accumulative system to have this opportunity even after the said bill takes effect.

"The system has started working [the pension system including the accumulative part], and I believe it would be right if people earning high and medium-sized wages who decided voluntarily to join pension funds, both the state and private ones, should not be deprived of this opportunity even after January 1, 2014," he said.

People should have the opportunity to choose, and "those who want to remain in this system [should have the possibility] do so," Putin said. This would also be a "not bad signal" for the market and would make operations of relevant financial institutions in this area economically feasible, he said.

As for postponement of this bill's entry into force, Putin pointed out that both the federal budget and the budgets of social funds for 2013 have already been compiled and balanced. "It is a question of whether it makes sense to change midway what has already been tuned up," and therefore it would be more logical if the bill took effect in 2014, he said.

"There is another argument: we need to balance the budgets of social funds for 2014 in a somewhat different way than was done in the previous proposals, bearing in mind that there will be extra revenues," he said.

Finance Minister Anton Siluanov told journalists later in commenting on the conference hosted by the president that, starting in 2014, people will be able to choose whether to preserve the accumulative part of their pensions or switch to the distributive system.

"All people are in the accumulative system now, and 6% will go to the accumulative part. Starting in 2014, amendments will be drafted so that people decide on their own within the 4% whether to remain in the accumulative system or go to the distributive one," he said.

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