29 october 2012

Prime Minister Dmitry Medvedev meets with Deputy Prime Ministers

Transcript of the beginning of the meeting:

Dmitry Medvedev: Colleagues, let’s discuss current issues. During the open discussion, I would like to outline an issue which has of course become a key aspect of the Government’s work over the past few months. This issue concerns all Russian citizens, Government members included. I am talking about the pension reform strategy.

Our goal is to guarantee the interests of different generations, to create a modern system and to modernise those basic foundations which were laid some time ago. However, nothing is eternal in this world. And there is no system that does not need modernising. This concerns the national pension system, all the more so as we have to consider all current trends, including the positive aspects of the demographic situation and those challenges that still remain.

In late September, I gave instructions at a Government meeting for the most open discussion of proposals to modernise the pension system to be set up, for the results of that discussion to be thoroughly analysed and for our approaches to be adjusted where necessary, while still of course preserving the draft concept which was submitted to the Government. The current discussion is rather lively and sometimes heated. This is no bad thing because it means that this public, open discussion is highlighting the positive aspects of the proposals and probably some problems too.

I would also like to note the need for cooperating with young people and those who have just started working and are launching their careers. You see, it is precisely this generation that should eventually have the opportunity to manage their own pension savings.

I’m glad that the discussion proceeded in different formats, including the Open Government. I heard your statement (addressing Olga Golodets) and other opinions. The discussion was attended by the Public Chamber, the trilateral commission on social and labour relations, experts and entrepreneurs and trade unions. The participation of public organisations was very important. The discussion was also held online.  

Ms Golodets, what are, in brief, the results of this discussion? We still have some time left. What has been taken into account and what has been left out? What should we do next? Please tell us what you think.

Olga Golodets: Thank you very much, Mr Medvedev. Indeed, we had a schedule for discussing pension reform and it was conducted in different venues – the Federation Council, the Public Chamber and the State Duma; experts of the Higher School of Economics and the Financial Academy also took part. At present, the reform is under discussion in the National Economy Academy. We held special meetings with representatives of the Student Youth Union and other youth organisations that showed interest in it. The Russian Union of Industrialists and Entrepreneurs had a special meeting as well as the special bureau of the Federation of Independent Trade Unions – all of its members took part in this discussion. Finally, the reform was reviewed by the Russian trilateral commission.

Importantly, almost all participants in these discussions accepted the main aspects of the pension reform. Nobody doubted the need for it. Everyone wants the pension system to be easy to understand and transparent. We all want it to be calculated once and for all for a long time to come. The rules should not be changed and the pension system should be fair in terms of deductions and payments.

At the same time, the participants had different views on the different aspects of the proposed reform. Thus, everyone agreed with reforming early retirement, but the trade unions insisted on changing it by levying a different tax on employers, whereas naturally enough employers did not agree to this and suggested changing the rights of employees to take early retirement. Recall that our current strategy provides for increasing taxes, and I hope that in the future we’ll concentrate on changing labour conditions. We want to reduce to a minimum the number of people doing hazardous and dangerous jobs in this country. This should be one of our strategies as well.

Some issues continue to be a subject of heated debate, whereas on others we have agreed a plan of action.

We have created a special permanent working group under the Ministry of Labour and Social Security, comprising workers’ and employers’ representatives, which will concentrate on the specific targets that we set ourselves as part of the reforms. This includes the development of the pension calculation formula, the further revisions of tariffs for the self-employed and other aspects of the reform.

I would like to point out some controversial issues on which we have so far failed to find sufficient support. The main sticking point is the pensionable service record, which we have already discussed. Another related topic is the insurance period. The Government’s proposal is in the short term to increase the required service record to 21 years. Today as we discussed the issue there was little support for this proposal. None of the population groups among which the subject has been discussed is ready for it yet, and there are very serious arguments in favour of finding a different way of pursuing the pension reform. These are the main factors.

Dmitry Medvedev: Very well, Ms Golodets. Thank you for the brief report. As to the gist of our discussion, it is not some ostentatious demonstration of the Government’s openness or of the transparency of our positions, but is a question of our readiness to meet public demand if we feel that there is a serious controversy and that public opinion must be taken into account. Therefore, as regards the insurance period, I suggest we come back to this matter, reconsider the situation and probably retain the existing rules while making amendments to the calculation methods and procedures. If the general position is as unanimous as you say it is, we, quite naturally, have no right to ignore it. Let us readjust our approach and then come back to the subject.

Olga Golodets: Good.

Dmitry Medvedev: Thank you. Now I would like to move on to another issue which has gained quite a high profile this month. Approximately one month ago I presided over a meeting on the heating season, pointing out that we had problems not only in larger areas and in the cities but also in the former military compounds which are being taken over from the Defence Ministry by local authorities. We spoke, among others, of the town of Tiksi-3 in Yakutia (Sakha). The Defence Minister said that the main work had been done but there was a transport problem: the only aerodrome, which had been in common military and civil use, was very old and run down, and had to be closed, leaving more than 9,000 local residents without an air link between Tiksi and the mainland. I know, Mr Dvorkovich, that you have been dealing with this problem, and I asked you and the Defence Minister and other colleagues to look into it. What are the results?

Arkady Dvorkovich: Mr Medvedev, the airport has indeed been closed since 1 October, but I think that the decision was taken without the requisite coordination between the Government of the Republic of Sakha (Yakutia), the Defence Ministry and the Ministry of Transport, and without a clear understanding as to how passengers and goods could be transported during the reconstruction of the airfield. By now these difficulties have been overcome, coordination has been fully established, the passenger and cargo delivery scheme has been clarified and has begun to work. A helicopter pad has been built at the aerodrome, passengers and cargo are flown by helicopter to the towns of Ust-Kuiga and Deputatsky, which have direct air links with the city of Yakutsk. Those are the flight arrangements for now, they allow passengers to travel, and food, medicines and all the necessary supplies that Tiksi needs to be delivered. The bulk of the goods were supplied during the seasonal delivery campaign, but there are still current needs which are being satisfied. The fact that goods have to be transferred by helicopter means that delivery costs have gone up, so the Government of the Republic of Sakha (Yakutia) has applied for financial support to help it through the period of the aerodrome reconstruction. I propose to consider this request and to make a decision on it within a week.

Dmitry Medvedev: All right. It’s a good thing you mentioned it.

Arkady Dvorkovich: By the end of the first quarter of 2013 all the design drafts for the reconstruction of the aerodrome will be ready and during 2013 the first reconstruction stage will take place: the damaged parts of the runway will be repaired, allowing An-24 and An-140 aircraft, capable of short landings and take-offs, to use the airfield so that passengers and goods will be able to be transported by as early as 2014. In 2014 the aerodrome reconstruction will be completed and from 2015 onwards the aerodrome will be fully functional. The Defence Ministry is planning to keep the aerodrome under its control, using it as a common military and civil facility. The Transport Ministry is considering a different arrangement, whereby the common airfield is put under the jurisdiction of the civil aviation administration. The issue is under discussion now, and a decision is expected to be taken in the coming months after we have made a full report to you.

Dmitry Medvedev: Good. The main thing is for the aerodrome to resume operations at last, and in the meantime, for normal passenger transportation to be maintained, because, regardless of the former military compounds’ new status, people still live there and they need to fly. Please pay attention to this.

Arkady Dvorkovich: All right.

Dmitry Medvedev: Thank you.