Begin calculations for pension payments from August 1st onward.
Starting August 1, 2025, Russian pensions will undergo a significant transformation with the introduction of a pension point system. This system, designed to provide a more accurate reflection of a pensioner's labor contribution, will replace the traditional methods of pension calculation.
The accumulation of pension points will depend on the annual insurance contributions made by citizens. The minimum annual insurance contribution, equivalent to 0.98 pension points (59,241 rubles), will be set, with a maximum contribution of 7.81 points (473,932 rubles). Citizens who fall short of the necessary pension points can supplement them through a voluntary insurance mechanism by making additional payments to the Pension Fund.
One crucial aspect of the new system is the premium coefficients for those who choose to postpone retirement by one to five years. This decision will increase the pension's basic part by 5-40% and the insurance part by 7-70%, providing an incentive for delayed retirement and higher pension benefits.
From January 2026, new legislation will update the way insurance periods for parents with multiple children are counted. Instead of a maximum limit of six years total for childcare periods, the entire period spent caring for each child will be counted without an upper limit, which may indirectly affect pension calculations for such parents.
The recalculation of insurance pensions is not just a formality but a means to improve the standard of living for many pensioners. It serves as a tool to partially compensate for the rise in prices (inflation) and is reported to be a step towards improving the well-being of millions of working pensioners.
In essence, from August 1, 2025, Russian pensions will be increasingly based on the accumulation and conversion of pension points derived from mandatory and voluntary contributions, with adjustments for retirement postponement and improved crediting of childcare periods starting in 2026. This shift towards a more transparent and equitable pension system is expected to promote social justice and establish a more honest link between pensioners' labor efforts and their future incomes.
[1] Source: Official Government Announcement [2] Source: New Legislation on Pension Reform, 2025-2026
- As part of this new pension system, investment in health-and-wellness and mental-health could potentially enhance mental well-being and contribute to higher earnings from pension points due to increased productivity during one's working years.
- The increase in pension benefits for those who decide to delay retirement can also indirectly positively impact personal-finance and wealth-management plans, as it allows for extra years of saving and investment in the stock market or real estate.
- With the new pension point system, individuals who are financially able might consider maximizing their annual insurance contributions to secure a more substantial retirement income, thus promoting financial security and stability in their later years.
