Russian Economic Development Ministry to Propose Raising Retirement Age

The Russian Ministry of Economic Development may propose raising the retirement age to 63 and 65 years for men and women at an upcoming economic council, ministerial materials obtained by RIA Novosti on Sunday indicate.

MOSCOW (Sputnik) – The Economic Council Presidium meeting chaired by President Vladimir Putin is scheduled to be held on Wednesday.

"An important step is to increase the retirement age for men and women (up to 63-65 years). This is not only needed from the standpoint of balancing the pensions system, but also to extend the productive life of future retirees and reduce the labor shortage in the market," the document states.

The ministry projected a natural unemployment rate in the range of 4-4.5 percent to ensure a tangible contribution for the Russian economy to achieve its growth potential. Its forecast envisions 5.8 percent unemployment by year-end.

Labor market flexibility is seen as one of the tools to reduce unemployment. These measures include stimulating internal migration, removing administrative obstacles to accessing social services, and developing the rental housing market.

"These are also measures to increase the flexibility of the labor code – expanding the practice of signing fixed-term contracts, simplifying dismissal procedures, including at the initiative of the employer for economic reasons," the document adds.

Additionally, the ministry deems it necessary to improve the mechanisms of labor migration and to pursue a more active policy in the field of employment.

The Russian Ministry of Economic Development forecasts 200,000-300,000 annual losses in the economically active population attributed to demographic trends expected to reverse in the mid-2020s.