Russia's Social Fund: A Shocking Reality Check

Hello everyone.

Let me introduce myself - I'm a former accountant. Although, I guess you could say there's no such thing as a 'former' accountant)

A LITTLE ABOUT ME

I've been working at a small company since 1998, handling accounting and HR.

I personally calculated employee salaries, made all the necessary deductions, and submitted reports to the tax office and all the relevant funds on time - no errors whatsoever.

As a result, all our employees - mostly older folks - were able to retire comfortably without any issues.

I made sure to keep a close eye on my own pension contributions, of course.

Over 30 years of continuous work, I've accumulated a huge number of pension points and an utterly ridiculous amount of pension savings.

But here's the thing:

They pushed back my retirement by 4 years.

I was supposed to get around 15,000 rubles a month, based on my experience and pension points.

By delaying my retirement by 4 years, the government saved around 720,000 rubles on me.

However, the government did offer some perks to pre-retirees, particularly women over 55.

They're pretty insignificant, to be honest, but I'll mention them anyway:

I've already received the following perks:Partial exemption from paying property tax on my owned apartment (I save around 2,000 rubles a year)You could also get exemption from paying property tax on other assets like a house, garage, parking spot, or summer cottage - but I don't own any of those.

I got a Moscow citizen social card, which gives me free public transport and some discounts on purchases (so far, I'm not saving anything)The problem is:

- I don't use public transport.

- I've asked about discounts in pharmacies, but it's pointless to show my social card because

the discount doesn't stack with my bonus card discount and doesn't apply to online orders.

I might be being misled, but the pharmacies I regularly visit have never given me a discount on medications using my social card.

- Discounts on groceries are available in very few stores and not at all times, and they

don't apply to all product categories.

I usually buy items on sale, and the social card discount doesn't apply to those.

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So, I decided to try and get my main prize - a one-time payment of the accumulated contributions from my salary.

But I was in for a disappointment. There would be no lump-sum payment. The government had taken a huge chunk of my pension savings, essentially borrowing it from me, and would pay me back gradually.

I'm telling you.

THE LUMP-SUM PAYMENT PROCESS FOR PENSION SAVINGS

The lump-sum payment of pension savings is made in two cases:

when, upon reaching the pre-pension age, a citizen does not accumulate the required length of service and points (11 years of service and 18.6 points are required this year);when the sum of their pension savings is insufficient to appoint a lifelong accumulative pension. In other words, the 5% threshold is not met in the ratio of the combined insurance and accumulative pension.

CAN HEIRS RECEIVE THE PAYMENT?

Pension savings can be transferred to heirs if the citizen did not receive a payment during their lifetime.

If a person received their accumulative pension for at least one month and then passed away, the remaining unused savings "burn out" and are not inherited.

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MY ACTIONS

I didn't quite understand whether I'd be able to get the payment or not, so I decided to visit the Pension Fund in person to get to the bottom of it.

APPOINTMENT THROUGH GOVERNMENT SERVICES

I booked an appointment through my personal account, BUT! The option to "appoint an accumulative pension" is not available on the website yet. So, I chose "appoint a pension" instead.

I was immediately called back and asked what I was applying for???

IT TURNS OUT YOU NEED TO BOOK AN APPOINTMENT STRICTLY FOR A SPECIFIC PURPOSE.

My appointment was cancelled, and I was immediately re-booked over the phone, correctly this time.

It turned out that you can get an appointment right away by taking a ticket at the terminal.

So, that's what I did during my next visit to the Pension Fund, which has been renamed to Social Fund since 2023.

REQUIRED DOCUMENTS

When visiting the Social Fund, you only need to provide two documents: a Russian passport and an SGLI.

You'll also need to provide your bank account details for the payment.

I have a MIR card from MCB.

VISITING THE PENSION FUND/SOCIAL FUND OFFICE

I left the office with a very positive impression of the staff and the facilities.

The office is spacious and comfortable:

The electronic queue:

I was pleasantly surprised by how quickly they processed my application.

But, as usual, the catch is in the fine print.

The staff member was silent as she scanned my documents and entered the information into the system. Then she exclaimed:

- Oh, you've got a lot of accumulated funds, they won't pay you out!

I was taken aback.

But she explained that I had to wait a month, and then I'd receive a letter in the mail with the rejection, and I'd have to come back to the PF again.

That's it, no further explanation, just goodbye!

Why do they make me wait a month for the rejection, when it was obvious to her from the start that I'd be rejected?

I only understood this after they started paying me my monthly pension.

The Fund is dragging its feet.

The pension starts being paid out the moment the application is submitted.

Fast forward a bit, I'll explain:

I went to the PF in December 2022, waited a month for the rejection letter, and then went back to the SF in February.

They started paying me from the end of February.

So, the state saved two of my monthly payments (for January and February).

So, friends, don't waste time.

Go to the Fund as soon as you reach the required age.

They won't compensate you for the months you've missed.

The same applies to the main pension.

They'll start paying it out not from the moment you reach pension age, but from the moment you submit your application.

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I'M GETTING A LIFETIME PENSION

As announced, I received a letter rejecting my request for a one-time payment:

I went back for a second appointment, where they told me to wait for the next letter and the money to be deposited into my account.

I asked how much I'd be getting.

Answer - I don't know. The calculation will be done.

And that's exactly what happened.

Starting from now, I'll be FOREVER getting 1952 rubles 86 kopecks every month.

The amount is calculated using some fancy math and coefficients,

based on the LIFESPAN that's been arbitrarily set by the bureaucrats.

To be able to choose the entire amount that my employer paid out for me, and which is my PERSONAL SAVINGS, I need to live for at least another 20 years.

And after that, the Fund will be paying me at a loss.

That's the Russian roulette we're playing. The stakes are set.

I'd rather live a shorter life, to be honest. That way, the state won't get its hands on my savings.

But if I live longer, I'll have to dip into my own pocket!

Either way, the state is coming out on top.

It's essentially given me a zero-interest loan for a pretty penny (around half a million rubles) with a 20-year repayment term.

But there's a silver lining.

The payment amount will be indexed, albeit very slightly.

And here's the best part:

This payment is a permanent fixture, regardless of whether I'm working or not, receiving a pension, or any other benefits.

That's what I was told.

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So, it seems my actions – albeit a bit delayed – have led to the desired outcome.

Now, I'll be receiving my pension contributions on a regular basis.

I started thinking about what I could spend my 1900 rubles on.

(For context, my monthly expenses include 8,000 rubles for my Moscow apartment's utilities and 4,000 rubles for my winter gas bill...)

But my mom just laughed and said: This is your ice cream money.

That reminded me of the famous advice given by Marie Antoinette:

- If they don't have bread, let them eat pastries!

It seems the Social Fund of Russia is just as out of touch with the people as the French queen, doling out a monthly sum that's just enough for a couple of pastries.

But they shouldn't forget what happened to that queen, who they seem to be emulating.

Her career ended on the guillotine.

For that kind of attitude, I'd give the fund a solid zero.

My rating doesn't extend to the lovely frontline staff who sit in the office, dealing with our pensioner nonsense, doing their best to keep up with the program's shortcomings.

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Fortunately, some issues can be resolved without visiting the fund's office – you can do it all online.

I, for instance, applied for compensatory payment for caring for an elderly person over 80 years old through the Social Fund's website.

I've detailed the process in a separate post:

Compensatory payment for caring for an elderly person