Home  Journals  National Interests: Priorities and Security  8(365) - 2018 August

Ensuring the socially adequate degree of pension protection for citizens: Global practices

Vol. 14, Iss. 8, AUGUST 2018

Article PDF Version

Received: 25 April 2018

Received in revised form: 19 May 2018

Accepted: 5 June 2018

Available online: 15 August 2018

Subject Heading: SOCIAL SERVICES AND EDUCATION

JEL Classification: H05, H55, J26, J32

Pages: 1551–1565

https://doi.org/10.24891/ni.14.8.1551

Importance Many countries, including Russia, face problems with pensions. The reasons for this are demographic, social and economic changes in the modern world, which affect the financial stability of pension systems.
Objectives The research analyzes possible difficulties that may arise in creating a socially acceptable level of pension protection for the Russian citizens, drawing upon world experience.
Methods The first part of the paper studies the adequacy of pensions in the OECD countries (and especially in the EU countries), and replacement rates in different countries, including developing countries and Russia. The second part represents opportunities for providing a socially acceptable level of pension protection in the Russian Federation.
Results The analysis showed the problems of the pension adequacy in different countries, which impede the attainment of a socially acceptable level of pension in the Russian Federation.
Conclusions and Relevance The Russian pension system is characterized by two main problems, i.e. low efficiency of the pension system due to the redundancy of pension rights and a high level of shadow economy. These two problems cause that the Russian Federation has one of the lowest replacement rates in comparison with other developed and developing countries. Financial literacy of the population is another important issue for Russia. The problems of pension should be addressed in a complex manner, as is done in developed countries, where not only the replacement of income is considered, but also poverty and employment indicators.

Keywords: pension system, replacement rate, pension adequacy, financial literacy, pension rights

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