Age crisis: the share of pensioners will reach a quarter of the population by 2035
The share of pensioners (aged 60-65) will reach almost a quarter of the population, or 34 million people, in 10 years, the Institute of Economics of the Russian Academy of Sciences predicts. Now it is about one in five residents of the country. At the same time, the number of employees will decrease by 2-5 million. The reasons are a low birth rate and an increase in life expectancy up to 80 years. This will increase the burden on the employed and may require new tools for reallocating resources, such as the introduction of an additional payment in the form of a basic income independent of seniority and insurance premiums. How else to ensure a decent income in old age is in the material of Izvestia.
Why is the proportion of senior citizens growing
By 2035, the proportion of men over 65 and women over 60 (retirement age) will increase to 24%, which is almost 34 million people. By 2045, the figure will approach 27% (about 37 million). Currently, about one in five residents of the country is in this group — about 31 million.
At the same time, the proportion of people of pre—retirement age will increase - women over 55 and men over 60. Now they make up 28% of the population, in 10 years they will be about 31%, and in 20 years — 34%. Such conclusions are contained in the work of Vadim Potapenko, Senior researcher at the Institute of Economics of the Russian Academy of Sciences, "Population Aging and the demographic burden on the Russian pension system," published in the latest issue of the Bulletin of the Institute of Economics of the Russian Academy of Sciences (Izvestia reviewed the study). The editorial board sent a request to the Ministry of Labor.
Approximately 146 million people live in Russia today. However, in 10 years the population will decrease to 141 million, and two decades later — to 139 million, the expert predicts. The upcoming reduction is related to the age structure: A large generation born in the 1970s is now approaching old age, and those born in the late 1990s and 2000s are in reproductive age, and there are much fewer of them due to the sharp drop in the birth rate in the 1990s.
At the same time, according to the researcher's calculations, life expectancy will increase: from the current 73 years for both sexes to 78 years by 2035 and to 80 years by 2045. Against this background, the number of employed people will decrease: from the current slightly more than 74 million people to 72 million by 2035 and to 69 million by 2045, the RAS expert predicts.
— The forecast that the proportion of elderly Russians will reach a quarter of the population looks reasonable: the aging of the population is a global trend, and Russia is moving in the same direction. The birth rate remains low, and life expectancy is gradually increasing," said Anastasia Gorelkina, Deputy Chairman of the Board of Directors of HC SDS JSC.
What is the threat of population aging
The growing proportion of the elderly carries risks for the pension system and the economy as a whole, the author of the study emphasizes. A significant number of elderly people, as a rule, do not work, so their provision falls on the shoulders of the next generations. Currently, employers pay insurance contributions to the Social Fund for employees, from which current pensions are formed. Accordingly, a reduction in the number of employees means a decrease in revenues and, as a result, the fund's budget.
At the same time, the age structure of the demographic burden will change significantly — the ratio of unemployed and employed. Historically, the majority of non-workers were children and youth under 20 years of age. In the coming years, the elderly will become the largest group among those who do not participate in the workforce. By 2045, the burden from the elderly will increase by 31-38%.
At the same time, the author of the article is confident that the Russian economy will have enough resources to maintain an adequate standard of living for all categories of the unemployed population.
In order to maintain an acceptable standard of living for pensioners, the total cost of providing for them must increase. But an attempt to simultaneously prevent a deficit in the Social Fund's budget will require an increase in insurance premiums. This, in turn, can worsen the competitiveness of enterprises, accelerate price growth and weaken consumer demand, the RAS expert notes.
The author considers the financing of pensions from two sources to be more effective — the insurance premiums themselves and additional money from the federal budget. As the demographic burden increases, the main share will shift towards government funds.
One of the options may be the introduction of a basic retirement income — universal additional pension payments that do not depend on the amount of insurance premiums paid for the employee. This mechanism would differ from both social benefits and fixed increases to the insurance pension, Vadim Potapenko specified.
Raising the retirement age to 60-65 partially compensates for demographic trends, but it will not be possible to completely solve the problem in this way, says Marina Kartseva, deputy director of the INSAP Center of the IPEI Presidential Academy.
The basic retirement income, a guaranteed part of a pension that does not depend on seniority, can be an effective tool and is already being used in a number of developed and some developing countries, said Natalia Milchakova, a leading analyst at Freedom Finance Global. However, its implementation in Russia is complicated by the fact that the country already has a social payment that actually performs a similar function. The only difference is that basic income in other countries is automatically assigned to everyone who has reached a certain age, while a social pension is issued upon application to the Social Fund. Therefore, the transition to such a system in the near future is unlikely, she believes.
How to ensure a good income in old age
There are other tools that can reduce the burden on workers and provide pensioners with a decent standard of living, noted Anastasia Gorelkina from SDS. According to her, programs to support the employment of the elderly and the development of flexible forms of work activity give people the opportunity to stay in the profession longer if they want to. Companies are also starting to actively attract older employees, appreciating their experience.
Nevertheless, not all elderly people can continue to work because of their well-being, said Marina Kartseva from the Presidential Academy. Therefore, the primary task is to take care of the health of the population.
Mass adoption of AI can significantly reduce the workload of employees. At the same time, in some industries, the widespread use of neural networks can reduce the number of people employed, according to Natalia Milchakova from Freedom Finance Global.
— To improve the standard of living in retirement, you can save 20% of your salary to the bank and form long-term savings. But to raise 1 million, receiving, for example, an average salary of 103,000 per month, you will have to save for about five years. Another option is to participate in a long—term savings program: over 15 years and taking into account state financing, you can save significantly more. The main thing is that these funds do not depreciate in the future due to inflation," the expert estimated.
Currently, clients of non-state pension funds receive higher payments, but there are only about 4% of the employed population in Russia, said Sergey Belyakov, president of the National Association of Non-State Pension Funds. An increase in this share could increase the replacement rate (the ratio of the average pension to the average salary). According to him, corporate programs can have the greatest effect (when the employer allocates funds not only to state funds, but also to the employee's NPF account): in countries where their implementation is mandatory, the reach of people reaches 50-60%, and in Norway, Iceland and Switzerland — more than 80%, he noted.
Such systems, where the state, the employer and the citizen themselves participate in the formation of pensions, have proven their effectiveness due to the distribution of risks and responsibilities, concluded Sergey Belyakov.
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