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Pensions for military personnel are calculated completely differently than insurance pensions. Their value is based on a person’s salary and is proportional to length of service. Therefore, it is possible to start receiving such a pension much earlier than a regular one. The recipient of such a pension has the opportunity to get a job and accumulate pension points to receive an insurance pension.
How is pension calculated for former military personnel?
According to Art. 43 of the legislative act of February 12, 1993 number 4468, the amount of payments to former army employees and their relatives is determined by taking into account monetary allowances. In addition, the size of the pension depends on:
- salary;
- ranks;
- length of service;
- indexing.
Pension coverage for army employees is divided into 4 types:
- For 20 years of service.
- For 12.5 years of service, with the recipient’s total experience of at least 25 years.
- For the loss of a breadwinner for disabled relatives: sons/daughters; mother/father with a disability or retired; a wife who is caring for a child under fourteen years of age.
- Due to disability that occurred during military service or due to illness during this period.
Salary is the salary of an army employee, including salary and allowances. According to Art. 2 of the legislative act of November 7, 2011 number 306, military personnel receive bonuses for:
- length of service - 10-40 percent of salary every month;
- rank - 5-30 percent;
- access to classified information – up to 65 percent;
- service under special conditions; performing tasks that are dangerous to life and health; achievements in service – up to 100 percent;
- conscientious performance of official duty - up to 300 percent of the annual salary.
Calculation algorithm
The initial value is taken as the salary of a military personnel. Then a bonus for the rank is added to it, the resulting result is multiplied by the bonus for length of service. The result obtained is added to the sum of the salary and bonus for the rank. This forms the basis for calculating pension benefits.
The base is multiplied by an adjustment factor (depending on length of service) and a reduction factor. The product is then multiplied by the district index. The result obtained will indicate the size of the military pension.
Legislative regulation of military pensions for military personnel
These payments are made not through the Russian Pension Fund (PFR), as for civilians, but from the budget of the Russian Ministry of Defense. The main provisions are determined by Law No. 4468-1 “On pensions for persons who served in military service” dated February 12, 1993.
There are pensions:
- For length of service . The most common type of government support for the military. To be appointed, a citizen must meet legal requirements - serve in the ranks of the Armed Forces of the Russian Federation (AF) for at least 20 years or have established reasons for resigning.
- For disability . It is prescribed to persons who have received limited capabilities due to injury or illness received while serving in the RF Armed Forces.
- For loss of a breadwinner . Recipients of this type of pension are members of the family of a deceased military man.
How are they calculated?
Pension benefits for military personnel are calculated taking into account length of service, rank and the amount of cash allowance (SDS) that the citizen had in the service.
For example, for those transferred to the reserve:
| Length of service | Pension calculation formula | Pension ceiling |
| More than 20 years | 50% of SSD + 1% for each year of service over 20 years | 85% of SSD |
| Less than 20, but more than 12.5 years, with a total experience of 25 years | 50% of SSD + 1% for each year of service over 25 years |
Officers' salaries are indexed to combat inflation - this is also reflected in the amount of pensions.
The law also introduced additional payments to the state support of retired military personnel. For example, if a citizen has dependents, the total payment will be increased by 32–100% (if there are three or more of them).
- Recalculation of pensions for non-working pensioners - conditions and grounds, submission and consideration of documents
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The remaining two types of pensions have the following features:
- For disability . Depends on the assigned category and the reasons for the disability. For example, persons who became disabled group I during hostilities receive a pension - 85% of the allowance.
- For loss of a breadwinner . The amount of payments is regulated by the cause of death of the serviceman. The maximum amount is due to dependents of those killed in service - 50% of the amount of monetary allowance.
How are they different from civilians?
According to current legislation, a military pension is awarded to persons:
- Those with at least 20 years of service in the Armed Forces or equivalent structures. These are the Federal Penitentiary Service, the Ministry of Internal Affairs of the Russian Federation and other law enforcement agencies.
- Dismissed from the ranks of the RF Armed Forces upon reaching the age limit.
- Those who retired due to health reasons or due to organizational and structural changes, and have reached 45 years of age. In this case, a total of 25 years of experience is required, of which at least half is service in the army, navy or law enforcement agencies.
In addition to the existing military state support, a citizen, having retired, according to the law, can then accumulate insurance experience. Then he becomes entitled to a second pension - according to age.
Changes in 2021
The upcoming reform project considers the following options:
- Replacement of state benefits for length of service with a one-time social package. Its size will be comparable to pension payments for several years. According to the developers of the reform, these funds are considered not as compensation for canceled payments, but as assistance when leaving military service and looking for further work. At the same time, retirees receive the right to free retraining in a new specialty and assistance in finding employment.
- The definition of pension is not based on length of service, but upon reaching a specific age (as for civilians).
- Increasing the length of service to obtain the right to a pension from 20 to 25 years with a change in the payment structure. Their maximum amount will be 95% of the salary (persons with 35 years of service experience can receive it).
These changes are currently under development. The first three proposed options are radical, and the last one acts as a gentle alternative, so it is preferable for future retirees.
In order for the reform of military pensions to take place, it is necessary to prepare a bill, consider it by the Duma and adopt the corresponding normative act. This takes from six months to a year and a half, so the earliest date for introducing new rules for state support for retired military personnel is 2020. It is also possible that the corresponding bill will not be prepared or rejected, and the payment system will remain the same.
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Bill in 2021
Last fall, the government submitted to the State Duma legislative draft number 556372-7 on prolonging the “freeze” of the reduction coefficient for another 2 years at a value of 0.7223. In other words, the government proposed to continue to calculate the military pension as 72.23 percent of the salary. The State Duma adopted the bill in the 1st reading, November 8, 2018.
For the 2nd reading of the legislative draft, which took place on November 20, 2018, adjustments were prepared and approved, which were made by presidential decree. On November 22, 2018, the State Duma adopted an adjusted bill.
According to this bill, the indicator 0.7223 will be used to calculate military pensions only until 10/01/2019. From this date the indicator will increase to 0.7368. Consequently, pension provision will be calculated as 73.68 percent of salary.
From 10/01/2019, pension benefits will increase due to a modified reduction factor. In addition, pensions for former military personnel, police officers, employees of the Ministry of Emergency Situations, the National Guard, and the Federal Penitentiary Service will be increased through indexation by 6.3 percent.
Reference! After its introduction on January 1, 2012, the reduction factor was equal to 0.54. Then this figure was to increase annually by 2 percent until it reached 100 percent. However, in fact, the last time it changed was 02/01/2017. In 2018, the indicator was frozen. Whether the upward trend will return is unknown. The next change is scheduled for 10/01/2019. Thanks to this change, pension benefits for former military personnel of the Russian Federation will be increased.
Why military pensions are growing
Unlike civil security (insurance, state and social), the calculation of pensions for army personnel has its own specifics. The size of payments directly depends on several factors:
- The amount of pay for military personnel. SDD is calculated in rubles and consists of salary according to military rank and salary according to military position. With a standard 20-year service, 50% of the SDS is accrued. For each year of military service in excess of the legally established value, an additional 3% is due.
- Reduction factor (PC). A PC is applied to the pension of a former military personnel, the amount of which, by law, must increase every year by 2%.
- Direct indexing. According to the Decree of the Government of the Russian Federation No. 238 (03/07/2018), the coefficient from January 1, 2019 is set at 1.04.
- Individual allowances. A retired military member's pension income increases by a certain percentage if the retiree, for example, is a veteran or has a disability.
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Will the reduction factor be cancelled?
There have been discussions about abolishing this indicator for a long time. However, it only came to a real legislative draft and reading in the State Duma only once. This happened in 2014. A member of the Communist Party of the Russian Federation, Tetetkin, introduced legislative draft number 631118-6 to the lower parliamentary house. The bill proposed to completely abolish the use of this indicator. Consideration of this legislative draft took place only in 2021. Most of the deputies voted against it in the 1st reading . The bill was approved by only 19 members of the State Duma.
The Russian government is short of funds, therefore, cancellation is not expected in the near future. In addition, the deputies planned to implement a “freeze” at the value of 0.7223 for the entire 2021 (until 01/01/2020). This is precisely what the legislative draft, submitted by deputies to parliament and approved by the State Duma in the 1st reading, was aimed at. Fortunately for military pensioners, Vladimir Putin has made his own adjustments.
The Communist Party of the Russian Federation tried to introduce a legislative draft to cancel the reduction coefficient, but in the winter of 2021 it was rejected. After this, the government did not touch upon this issue in any way, since it planned to assign pensions taking into account 100% monetary allowance only from 2035. Now the increase in the reduction coefficient cannot be called stable. Therefore, it will not be canceled for now.
