RUSSIA - Russian state pensions for 2007 have been increased by 15.4% despite the fact the Russian Pension Fund (RPF) is experiencing significant funding troubles.
The Russian Federal Council approved the pension fund budget for 2007, which will see state pensions increasing by 15.4% compared to 2006. The increase actually missed the 20% mark demanded by Vladimir Putin.
The RPF posted revenues of RUB1.845trn (US$70.2bn), and the council said RUB 88.2bn will be put towards the fund’s deficit.
According to Gennady Batanov, RPF head, the government needed to take measures to stabilise the fund’s financial situation and make better use of the money collected.
Although the budget was approved, Sergey Mironov, chairman of the Federal Council, said more needed to be done.
“If the senate fails to address the funding problems within the pension fund, the council will hold parliamentary hearings on the issue at the beginning of next year,” Mironov declared.
A Fitch Ratings report released yesterday showed social expenditure, including pensions, in Russia had increased to 41% of the state’s totol budget.
This therefore indicated that government spending could not continue to increase at the rate demanded by officials.
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