Foreign Policy Research Institute A Nation Must Think Before it Acts Reversing Pension Policy in Russia…Again
Reversing Pension Policy in Russia…Again

Reversing Pension Policy in Russia…Again

About a month after Vladimir Putin’s re-election as President of the Russian Federation in March 2018, Prime Minister Dmitry Medvedev announced that the Russian government would be considering proposals to increase Russia’s pension age. This announcement was a reversal of a long-standing policy by Putin and his United Russia party to avoid doing just that. For the past 18 years, Putin has either avoided the question of raising Russia’s retirement age, or promised not to. Now, he says, things have changed. Putin recently announced that he does not like raising the pension age, but argues it has become necessary.

Medvedev was the one to make the actual announcement, and at a strategic time, just a month after Putin’s re-election and during the World Cup to maximize distraction from the issue. Per the Russian constitution, Putin cannot run again for another consecutive term although he could legally take a term off and run again after that (which is what he did from 2008-2012 when Medvedev had a turn as president while Putin served as Prime Minister). This term might be the last one for Putin who will be 72 in 2024 when his current six-year term ends (and he would, therefore, be 78 before he can legally run for president again under the current Russian constitution). As such, right after his last election is an excellent time to take potentially one of the least popular moves possible—raise the retirement age.

Protests against raising the retirement age began in June and have continued throughout the summer. The protests on Sunday, July 29 were reported to have had as many as 18,000 participants. While the approval ratings for United Russia have slipped as a result, Putin himself is still popular. In July, the Duma passed the first reading (of three total) of the legislative proposal for raising the retirement age thereby providing a rallying point for more protests. The first reading passed with almost unanimous support from members of United Russia. Although we’re likely to see protests and objections continue throughout the fall, it is also very likely that some form of the bill will be adopted in December 2018, and the government will proceed with plans to raise the retirement age.

Why is Raising the Pension Age so Unpopular?

There is a long legacy of the state being responsible for providing old-age pensions in Russia. In the Soviet state, pensions were not overly generous, but they provided adequate support for a large portion of the population and—critically—they were guaranteed.[1] Previous attempts to curtail pensioners’ benefits—as when the government enacted cuts to benefits in January 2005—have led to mass protests.

It is not surprising that raising the pension age is unpopular—raising the retirement age is unpopular around the world. Once citizens have been promised specific benefits at specific times, they are loathe to give them up. For instance, there were protests in France in 2010 and in Germany in 2014 when the government took measures to increase the retirement age.

Putin and United Russia care very much about what pensioners think. Retirees and near-retirees in Russia have proven willing to protest and vote. Russia does not have competitive, free and fair elections, but it does have elections and the government cares about how much it has to cheat. In short, the Russian government has good reasons not to spark widespread discontent.

Why has Putin Decided to Raise the Pension Age?

Many economists and policymakers have long argued that Russia needs to raise its retirement age. Russia has a relatively low retirement age of 55 for women and 60 for men. These ages are much lower than in Europe where retirement ages are typically 5 to 10 years higher. As a point of comparison, to draw full Social Security benefits in the United States the age is 67 for those born after 1960. That is 12 years older than for Russian women and 7 years older than for Russian men. As a sign of the policy turn-around in Putin’s government, one of these long-time advocates of raising the retirement age, Alexei Kudrin, the former Minister of Finance who resigned in 2012 over disagreements with Putin’s policies, has been brought back as the Chairman of the Audit Chamber. This post is not directly related to pension policy, but nonetheless signals an important shift in the government’s economic leadership.

The problem with a low retirement age is that it costs the government a lot of money. The earlier people retire, the longer the government has to support them. That is why governments in developed countries around the world have faced pressure to raise the retirement age.

Who is Organizing the Recent Protests against Raising the Pension Age?

Opposition to raising the retirement age has come from a variety of places. Protests occurred in cities across Russia. The largest protests were in the Omsk, a city in southwest Siberia. Here, leaders of the local branches of the political parties Yabloko, the Liberal Democratic Party of Russia (a nationalist party), the Communists, and A Just Russia organized protests alongside supporters of the high-profile opposition leader, Alexey Navalny.

It is not surprising that Navalny has taken up the issue of pension reform. This is a prime opportunity to siphon support away from United Russia and Putin, albeit with years to go until another national election. This is a potentially very unpopular move by Putin especially among older demographics that have tended to support him. The opposition could pick up some support by taking up this issue.

Not all of those opposed to Putin have jumped on the bandwagon opposing raising the pension age. By contrast, former presidential candidate and opposition to Putin—Ksenia Sobchak—has come out in support of the government’s plan to raise the retirement age.

What is the Significance of These Recent Protests? Are They Likely to Undermine Putin’s Long-Term Support?

Benefits for pensioners sparked big protests—the largest at the time (because it predated the 2011 and 2012 electoral protests)—in January 2005. But the government was able to move past that. There is no national election coming up soon, so opposition leaders are going to really need to maintain focus and organization on this issue, and that will be a hard task to accomplish. Putin has a lot of time to turn things around before the next Duma elections in 2021 or the next presidential elections in 2024. But one can envision a scenario where the government raises the pension age and has plenty of time to make other concessions and bring other issues to the fore before the current protests cause real problems. One possibility is that we see a lot of public protest about raising the retirement age through the rest of 2018, the government makes some concessions in the legislation (maybe) and passes the bill anyway, and we hear less about this from 2019 onwards.

In the West, news about Russia—understandably—has focused on the country’s interference in the politics of other countries including stories about poisonings and electoral interference. But domestic Russian politics tells us a great deal about the regime’s dynamics, and welfare state politics are an important authoritarian tool. This is not the first major turn-about in Russian pension policy. Pension politics has long been the domain of the elite with surprisingly little input from organized interest groups or political parties. Bureaucrats and politicians and other policy advisors have steered Russian pension policy in the direction they choose. In 2013, the Russian government began reversing a major pension reform that had been backed by the Putin administration and adopted in December 2001.

Once again, with the raising of the pension age, we see Putin and other elites backing a policy reversal when doing so is in their best interests. Whether or not this is the best policy course in the long run, the policymaking process here is far from democratic. But Putin is a savvy long-standing leader and, once again, he may just get away with it.


[1] Linda Cook, The Soviet Social Contract and Why It Failed: Welfare Policy and Workers’ Politics from Brezhnev to Yeltsin (Harvard University Press, 1993).

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