Can You Trust With Your Pension?
By Vladislav Schnitzer, The Moscow Times
October 20, 2003
As they approach the legal retirement age, most
working stiffs get a little antsy and start bustling from office to office
securing all the documents they will need to start collecting their
pensions when the time comes. My daughter-in-law went through this
recently. She had a devil of a time getting an earnings statement from the
accounting department of a company she used to work for. The problem was
that the company had gone out of business. Her hopes were dashed when the
pension office deducted all the money she had been paid while on sick
There was a time when she took a lot of
sick leave because her son, my grandson, was frequently ill and couldn't
attend preschool. It seems that raising children is a strictly private
activity that parents engage in their own time and on their own dime. The
legislators who passed that law obviously didn't raise their own kids. The
politicians are making a lot of noise these days about the need to
increase the birthrate -- and benefits for children and young families.
But all that talk won't compensate my daughter-in-law.
Not long ago, our enlightened lawmakers
came up with the idea of reforming the pension system in order to provide
for the future needs of the next generation of pensioners. The
"timely" reform actually requires workers to take their future
into their own hands by managing the money that is deducted from their
paychecks each month. What's all the fuss about? The government deducted
pension contributions from my wages all my life, and to be honest I don't
know if I've got it all back yet.
Not long ago, my son received an
official letter from the Pension Fund. The letter informed him about
investment accounts, and instructed him to select a private management
company or state-owned Vneshekonombank to look after his money. But the
letter failed to tell him which companies are reliable (we've seen too
many pyramid schemes in the past 10 years).
I asked my son what he intended to do.
"It's the same as ever," he answered. "The only thing
that's clear is that nothing is clear. I can't make heads or tails of what
they write in the newspapers. There's so much information, but you can't
find the answers to basic questions, like what will happen to the money in
your retirement account if you die before you retire? Where exactly do the
deductions come from? After all, in my job we get bonuses, reimbursement
for expenses, sick pay and subsidies in addition to our straight salary.
What will happen if inflation goes through the roof?"
In the end, my son decided that the safest place to put his retirement money was in his own pocket. "Who knows better than I do how to handle my own money?" he said.