Information has recently appeared, according to which Russian citizens will have to deduct part of their earnings for the creation of individual pension capital.
Then the Ministry of Finance developed a new draft law “On the Guaranteed Pension Product”. The initiative is related to the development of a new funded pension system, the terms of which assume that contributions to a future pension can only be made on a voluntary basis.
The federal government is modernizing the system of additional pension provision. True, we can not talk about some fundamentally new inventions in this.
Currently, there are various pension systems abroad. A significant part of them is based on government payments and savings created by people.
The US pension system – retirees have a choice
The retirement age in the United States is 67. You can retire earlier, but then the amount of the pension will be less. If a person becomes a pensioner after the established age, he is entitled to an additional payment. In the case when a person does not live up to retirement, part of the money accumulated during his work goes to his spouse. If a person could not earn a pension (for example, there is no minimum ten-year service), he receives social benefits. This is about 40% of the average income in the US.
The second pension is funded. Among the most famous voluntary insurance programs are the IRA (Individual Retirement Account) and the 401k plan. With the latter option, the account is opened not by a citizen, but by an employer. He, like the citizen himself, can make contributions for a future pension.
Any pension contributions are exempt from taxes. In addition, they are insured by Benefit Guaranty Corporation. Every American has the right to manage a retirement account. He can invest money in investment funds, in securities. A person can also use pension savings to pay for tuition, receive or pay off a loan.
New Zealand: the basis for a pension is citizenship
In this country, the retirement age is 65. Its size does not depend on the length of service and deductions. The main thing is the presence of citizenship and residence in New Zealand for at least ten years.
Citizens also have the opportunity to participate in a system that provides for accumulative insurance. There are several of her schemes. It is necessary to give for a future pension from 3% to 10% of earnings. Employers (at least 3%) and the state also contribute to a person’s future pension. The financing of the latter is in direct proportion to the level of employer and citizen contributions.
The pension account manager offers various investment schemes. They differ in the degree of risk. But savings can be invested in various funds. The person who owns the account can use the money to purchase a first home if he finds himself in a difficult financial situation. You can refuse to pay fees to KiwiSaver only on the basis of your own written application.
Retirement in Japan
Payments for a future pension must be made by everyone living in Japan. This applies to both foreigners and students. You have to pay after reaching the age of 20. Everyone participates either in the state pension system or in the professional one. It all depends on the area in which he works. If the fund is public, then the money goes to the Japan Pension Fund (GPIF).
The basic pension is paid by this fund to all pensioners, including entrepreneurs, farmers and others, currently referred to in Russia as self-employed. The main thing is that a person must transfer contributions every month. Their size is fixed. It’s 150 dollars. To be eligible for a pension, a person must have worked for 25 years.
To receive a labor (professional) pension, a Japanese employee must make contributions in the amount of 18.3% of the income received. In this case, half of the amount is paid by the employer.
Switzerland is one of the best pension systems in the world
A significant part of pensioners in the country receive from 60% to 80% of the salary that was paid to them. Pension provision is at a high level and is considered the best pension system in the world due to the fact that Switzerland has a three-tier pension system. These are the basic state pension, labor pension and partial voluntary pension insurance.
The state guarantees the residents of the country, who are retired, a living wage, in the event that they reach retirement age: 65 years old for men and 64 years old for women or disabled people. If necessary, indexation of payments is made. After reaching the age of 18, all citizens must pay contributions to the AHV state pension insurance system. The final payments depend on the total amount of contributions, as well as on the length of service. At the same time, pensions are co-financed by the state.
The employer also pays contributions for future employee pensions. He participates with them in equal proportions in the BVG (Berufliche Vorsorge) – the occupational insurance system. However, only those citizens whose annual income is more than 21.3 thousand francs (21.7 thousand dollars) can save up for a labor pension. All proceeds are placed in funds, invested in stocks, bonds and real estate.
The third stage of the pension system in Switzerland is a tier based on voluntariness. Contributions are paid by citizens on their own (up to 20% of income). Programs for pensioners are offered by private funds, large insurance companies, and banks. Some of them provide bonuses. They are offered in the form of life insurance, health insurance, guaranteed payments. In addition, a person can use the money to purchase a home or start a business.
Pensions in Norway
The best example of a high pension, provided that no contributions are made to it, is the pension system in Norway. The size of pensions in this country is second only to those pension payments received in Denmark.
The reason for this success is simple. Norway is an oil producing country. The money that goes into the sovereign fund (Government Pension Fund Global, GPFG) is used by the Norwegian government for investments. Unlike Russian FIUs and NPFs, the Norwegian pension fund invests in securities and real estate in foreign countries. According to Norges Bank data, 70% of all funds available in the fund are invested in shares. The fund’s asset is more than a trillion dollars. At the end of 2018, the return on GPFG managers was 6.1%. In 2017, the figure was 14%.
To be eligible for full pension coverage, Norwegian residents must have worked for 40 years. Retirement age – 67 years. The amount of contributions to the national insurance system depends on the work of a citizen: employed or self-employed. You need to pay from 8% to 11.5%. And residents of the country participate in professional pension programs (principle of co-financing) or save money on their own.
Pensions in Italy
In Italy, strict requirements for pensioners have been relaxed. This is one of a small list of countries that have gone this way. The pension reform was carried out here in 2011. The retirement age (the right to a state old-age pension) is 67 years. In August 2019, another amendment came into force, providing various options for retiring the previously named age.
The pension reform of 2011 provides for a complete transition to the funded system. Monthly contributions deducted by employees are called “contributions”. They go to the National Institute of Social Security (INPS). The second option is “professional cash desks”. The transferred funds are spent not only on future pensions, but also on sick leave payments and compensation if a person has lost his job (up to two years).
“Contributions” are calculated according to a rather complex system. Profession, position and type of employment are taken into account. Their sizes change annually. Payments for an employee are made by the employer.
Average pension in different countries of the world
The values of the average pension are given in the national currency of the country and in US dollars.
- Australian Union AUD 1,800 – $890
- Austria EUR 2,260 – $2,700
- Azerbaijan AZN 216 – $127
- Argentina 2,757 pesos – 110 $
- Belarus 398 Belarusian rubles – 250 $
- Bulgaria 200 BGN – 122 $
- Brazil HUF 75,000 – $665
- UK £610 – $830
- Hungary HUF 75,000 – $285
- Germany For men – 1,013 euros ($1,214); For women – 591 euros – 708 $
- €50 – $1,018
- Denmark EUR 2,800 – $3,356
- Israel NIS 6,800 – $1,890
- Iran 4410008 Iranian rials – 105$
- Ireland EUR 1,600 – $1,918
- Spain €908 – $1,088
- Italy EUR 1,000 – $1,198
- Kazakhstan 66,050 tenge – 201 $
- Canada CAD 573 – $6095
- Cyprus EUR 1,300 – $1,358
- Korea 204,952 Korean won – $190
- Kuwait KWD 906 – $3,000
- Lithuania 255 EUR – 305 $
- Mexico $1,000 – $1,000
- Netherlands EUR 2,292 – $2,700
- New Zealand NZ$400 – $276
- Norway NOK 15,000 – $1,842
- United Arab Emirates AED 10,200 – $2,780
- Poland 382 EUR – 450 $
- Portugal EUR 540 – $647
- Romania 640 lei – 163 $
- Russia 13,000 rubles – $200
- Singapore SGD 336 – $250
- Slovakia EUR 385 – $461
- United States of America $1,160 – $1,160
- Republic of Turkey 500 TL – 112 $
- Finland EUR 1,210 – $1,450
- France EUR 1,000 – $1,198
- Croatia 1 340 HRK – 214 $
- Czech Republic 420 EUR – 503 $
- Chile 157,952 Chilean pesos – $250
- Switzerland CHF 2,000 – $1,112
- Sweden SEK 1,697 – $2,000
- Estonia 410 EUR – 491 $
- Japan 166,022 Japanese yen – $1,500
