В.Путин.Послание ФС РФ.26.04.07.Part 8

Annual Address to the Federal Assembly.Part 8
April 26, 2007
Marble Hall, the Kremlin, Moscow

Послание Федеральному Собранию Российской Федерации.Part 8
26 апреля 2007 года
Москва, Кремль, Мраморный зал

It is my conviction that if we act in time to take all the necessary measures, there will not be any crisis in the pension system.

I also believe that there is no objective need to raise the retirement age in our country in the foreseeable future, not only because this would not in itself resolve pension provision issues for once and for good, but above all because we still have considerable possibilities we can make use of to ensure that the Pension Fund is better provided for and that would cover any deficit that could arise.

This takes us back to the issue of tax collection and to bringing wages out into the open, and I ask the Government to take the appropriate measures in this respect.

We also need to create a system of incentives so that people who have reached retirement age can, if they wish, voluntarily continue to work. Allowing people to voluntarily continue to work should, in the future, lead to a considerable increase in pension payments.

I think that pensions should increase on average by at least 65 percent over 2007-2009.

I also propose that we settle the issue of the so-called Far North pensions, so that pensioners both those who have already resettled from the Far North regions and regions with a similar status, and those who will do so in the future can keep the greater part of the pensions they previously received. A decision on this matter should be made this year and I ask the Government to do this.

As well as indexing pensions, we must also provide incentives for voluntary retirement savings programmes a very important aspect of pension schemes. In this respect, I propose that some of the money from the National Prosperity Fund be spent on co-financing voluntary retirement savings programmes.

What we must do, in essence, is to develop our citizens pension capital.

I propose the following scheme: for every 1,000 roubles a person makes in voluntary contributions, the state should add another 1,000 roubles to his personal pension account in the Pension Fund. Of course, so as to ensure that these contributions do not lose their value over time, they should be reliably and profitably invested. I ask the Government to define the maximum amount of this kind of co-financing in order to ensure a fair distribution of funds among the different social groups.

In the future, available funds from the National Prosperity Fund could be used to cover an eventual deficit in the pension system if it were to come about.

The Funds financial resources should be increased to levels that would make it possible to meet the set objectives through the revenue obtained by their effective investment. I will not name any specific figures now the Government will get nervous if I name them, but it knows what kind of amounts we are talking about. I ask you to ensure that this does not remain just empty words.

Together, these measures I have mentioned should ensure that our citizens retirement provisions increase and should also guarantee the pension systems reliable functioning in the long-term perspective.

Colleagues,

Russias rich educational, scientific and creative heritage gives our country clear advantages for creating a competitive economy based on knowledge and intellect, an economy driven not by the rate at which natural resources are exploited, but above all by the ability to come up with new ideas and inventions and introduce them more rapidly than others into everyday life.

We have prepared the conditions for implementing precisely this strategy. We have passed the necessary laws and established the necessary structures. Now, using the base we have laid, we must begin setting concrete objectives.

In this respect, I want to come back to the question of making use of the National Prosperity Fund. Part of the Funds money should be spent on capitalising development institutions, above all the Development Bank, the Investment Fund, the Russian Venture Company and others. For this purpose I propose that 300 billion roubles be allocated this year with further allocations for this work in the years to come.

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