From Russia With Love

Earlier this week, one of our operatives stumbled into a back channel in the basement of Trump Tower that led directly to the Kremlin in Moscow. It gave our operative an opportunity to find out how the Russian government supports its elderly population.

Background
Russia has always been home to a mixture of Western and Eastern values, and these values affect attitudes toward aging. In the Southern Republics, having an older person in your family commands respect and honor. The Central and Western regions of the country are more influenced by European values, with fears about the aging process and becoming a burden to their families.

Life Expectancy/Retirement
In 2014, life expectancy in Russia was 79 years for women and 64 years for men, up from 74 and 59, respectively, in 2010. The formal retirement age for women is 55, and for men 60. Formal retirement means that if a person who reaches the appropriate age wants to retire, he/she can do so, although it is not mandatory. A person can continue his/her career after reaching the retirement age, while also acquiring the social status of a retiree and receiving a retirement allowance from the government.

In 2014, there were 33,788,600 people over the retirement age representing 23.3 percent of the national population (143,666,900). The proportion of the “retirement age” population is expected to grow to 28 percent by 2030. 12.3 percent of 55–59 year-olds, 6.7 percent of 60–64 year-olds, and 3.2 percent of 65+ year-olds work past the formal retirement age.

Pension System
Russia’s pension system has two pillars: the insurance portion and the funded portion. The former is a pay-as-you-go pension, much like Social Security in the United States: Current workers are charged payroll tax (directly from their wages) that redistributes money to retirees. Payouts are determined by a point system (each point is worth about 74 rubles). Pensioners are assigned a certain number points based on their income and other characteristics (state sector work, veteran status, etc.).

The second pillar is perhaps better described as a nest-egg: current workers can elect to divert a portion of their payroll tax into an individual account that is either state run or privately managed. However, this is not a private arrangement like a 401(k). All pension funds collected through payroll taxes are first sent to the Pension Fund of Russia, and are then transferred to whatever management arrangement a worker has selected.

Overall, pension amounts can range from hardly enough to live on to that comparable with the salary of a middle-class specialist.

Health Care
On paper, Russian citizens are entitled to free universal health care through state-run medical clinics. In practice, they are required to take out compulsory private medical insurance. It’s also common for patients at state hospitals to bribe doctors for adequate treatment. Although hospitals in Moscow and St. Petersburg, the country’s two biggest cities, are largely serviceable, the situation is different in cash-strapped regions which reportedly have more in common with Third World countries.

Russia’s health care system is ranked 130 out of 190 countries by the World Health Organization. France is first followed by Italy, San Marino, Andorra, Malta, Singapore and Spain. Canada is ranked number 30, the US is 37 and China is 144.

Social Services
Social services for aging people in Russia include a variety of options. There are educational centers called “third age schools,” where aging people can learn different subjects and skills.

For those who need social or medical assistance, there are “social houses” and “homes for elderly.”  “Social houses” provide temporary care and are supported by the government. Aging people live in their own apartments for a limited time (usually several weeks) supported by doctors, nurses, social workers, and psychologists.

“Homes for elderly” are permanent residences staffed by social workers, doctors and nurses, where residents receive everything they need for their health conditions. There are both public and private “homes for elderly.” Due to traditional and very conservative values, “homes for elderly” are associated with a variety of negative stereotypes, and most people, both young and old, are afraid of such institutions.

Social support includes help of a material nature, both monetary and goods, and of a non-material nature, such as special services and benefits (e.g., discounts for certain services). There is also a list of free medications that people can receive in certain pharmacies, which has provoked some public discussion about the medications that are included in the list, and the availability and provision of these medications in the pharmacies.
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Learn more
https://academic.oup.com/gerontologist/article/56/5/795/2605358/Aging-in-Russia
http://www.newsweek.com/2016/12/02/dire-russia-health-care-523380.html
https://bearmarketbrief.com/2016/11/01/a-pension-to-detail-russias-pension-system-and-its-challenges
http://thepatientfactor.com/canadian-health-care-information/world-health-organizations-ranking-of-the-worlds-health-systems

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