Healthcare Minister Zurabov hopes the ministry reform will be effective

In the next few years, the accumulation part of the pensions of those Russian citizens who were born after 1967 will grow slower than the same part of pensions of older citizens, Mikhail Zurabov, Minister of Health and Social Development, told RIA Novosti Monday. The reason is that in the next few years wages and revenues of the pension system will grow faster than investment revenues. "This is the specific feature of this stage of economic development," said the minister.

He explained the situation on the example of two people, one above and the other below 50, whose earnings are the same. Sums of 40,000 rubles (one dollar is approximately 28.5 rubles) have been transferred to their accounts in the Pension Fund within the year. The entry on the younger person's account says it received 40,000 rubles, including 5,000 rubles of the accumulation part, while the entry on the older person's account says it received 40,000 rubles. When the year is over, the older person's receipt of 40,000 rubles will be indexed by 12,000 rubles, in accordance with the wage growth. "Only 35,000 rubles from the entry on the other person's account will be indexed, so that the aggregate sum is 45,600 rubles, while the 5,000 roubles have been invested at a 15% increment (600 rubles)," said Zurabov.

"If we add up the figures, the total sum on the account of the younger person will be smaller than the sum on the account of the older one, which does not include an investment element." According to the minister, when the pension system was devised, the authors did not hope for an immediate result. "We said the accumulation part would bring considerable revenues after the market has worked for 5, 6 or 10 years, and we meant above all younger people," he said.

Zurabov did not rule out the possibility that a situation may develop in 10 years when the growth of wages will be 2% while investment revenues may equal 12%.

Today the state invites persons born before 1967, while keeping their insurance payments, to accumulate and invest additional pension funds. "In addition to the money entrusted to the state, you can transfer 4% of your wages to a private profit organization, such as a non-state pension fund, getting income tax privileges for this (you will not have to pay income tax from this sum)," said the minister. "Or you may invest the additional 4% in the Pension Fund."

Zurabov believes that this scheme will increase the pension savings of the people quicker than in the past, by 10-12% a year.

The structure of the new ministry and its services can have a serious effect on the entire system of social management at the federal level, the minister said. He pointed out that the basic functions - the choice of policy, its formalization, and the drafting of relevant laws (including government resolutions and federal laws) - are clearly divided in the ministry. "The task of the ministry is to elaborate a development strategy, meaning large-scale projects that can be implemented only if we have the political will, understanding of priorities, and the people who will do the job every day," said Zurabov.

"In the current situation, the property part of medical and social establishments belongs to the state or the city," the minister went on to say. "However, this system in not optimal for the management of the services and financing of medical assistance." This does not mean, though, that such establishments will be privatized. "But they should have more freedom in disposing of these funds, introducing more effective wage systems and choosing better forms of healthcare."

Zurabov also said that it is the first time we have a chance to create a single federal supervision agency for healthcare and social development, that would control the quality and price of medicines, access to them, and pharmacological licensing. "The issue of quality of medical assistance, medicines, and social services is becoming a priority of the ministry." The minister said a special agency is being set up to fulfill this function.

Another supervision agency, based on the former service of sanitary and epidemiological monitoring, will be responsible for consumer rights and human welfare. It will also take over the functions of the State Trade Inspection (including control of advertising) and several structures of the Railways Ministry (control of the sanitary and epidemiological situation on transport).

Management of employment relations, reduction of unemployment, and financing of the so-called active employment programs are another of the ministry's tasks, which entails above all the organization of social jobs for temporary employment, such as road building and development of the communications and road infrastructures.

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