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Russia's Pension Reform: Intermediate Results

Over several recent months, the key issue in the discussion on the Strategy of Long-Term Development of the Pension System of the Russian Federation prepared by the RF Ministry of Labor was reform of the funded component of pension. The critics of the mandatory funded component in Russia usually point to its following drawbacks: low yield on investment; absence of any funding sources for the transition period (the contemporary employed generation has to bear a ‘double burden’: provide financing for the contemporary generation of pensioners and accumulate resources for their own retirement), and lack of any mechanism that can guarantee a yield on accumulated pension savings.