Retirement strategies of Russians ( 2005-2010 )

1. Olga Kuzina Higher School of Economics, Moscow Retirement strategies of Russians (2005-2010)

2. Retirement strategies Do people have an idea about the amount of their future state pension? Do they think that their state pension will be enough to make their ends meet? Do they expect to have additional sources of income? What are these sources? How many do make any financial provisions for their retirement? From which sources do current pensioners draw their incomes? Do people know anything about the state program of co-financing the retirement savings? What do people think about this program? How many do participate? How are people going to ensure that their incomes will be sufficient to provide them an acceptable level of living?

3. Datadescription % Male45 Female55 100 18-24 14 25-34 20 35-44 17 45-59 29 60+20 100 All-Russian surveys N=1600 Sample error -3,4% • Waves • 2005 – ZIRCON • 2007 – НАФИ • 2009 - HSE • 2010 – HSE • In all waves the same question wording and sampling methodology was used

4. Retirement income strategies of people of working age

5. RETIREMENT INCOME EXPECTATIONS – VERY FEW ARE SURE THAT THEY WILL BE ABLE TO LIVE ON THE STATE PENSION When you will retire do you think that the level of your pension will be enough to live on? % of people of working age

6. The level of retirement confidence in the USA

7. RETIREMENT INCOME EXPECTATIONS DO NOT DIFFER ACROSS AGE GROUPS 25+ When you will retire do you think that the level of your pension will be enough to live on? % in age groups, 2010

8. RETIREMENT INCOME EXPECTATIONS DO NOT DIFFER ACROSS QUINTILE INCOME GROUPS When you will retire do you think that the level of your pension will be enough to live on? % in quintile income groups, 2010

9. RETIREMENT INCOME EXPECTATIONS – EVERY SECOND EXPECT TO RECEIVE INCOMES FROM OTHER SOURCES Do you expect that apart from the state pension you will receive additional income from other sources? % of people of working age

10. TYPES OF ADDITIONAL INCOME SOURCES IN RETIREMENT, %OF THOSE WHO EXPECT TO HAVE INCOMES FROM OTHER SOURCES IN RETIREMENT

11. AGGREGATIVE ANSWERS, %OF THOSE WHO EXPECT TO HAVE INCOMES FROM OTHER SOURCES IN RETIREMENT

12. TYPES OF ADDITIONAL INCOME SOURCES IN RETIREMENT, % OF PEOPLE OF WORKING AGE

13. Retirement income strategies of pensioners

14. TWO THIRDS OF PENSIONERS DO NOT HAVE ADDITIONAL SOURCES OF INCOMES, %OF ALL PENSIONERS

15. TYPES OF ADDITIONAL INCOMES IN RETIREMENT, %OF ALL PENSIONERS Over 100% because this question allowed multiple choice answers

16. Knowledge on the state program of co-financing the retirement savings

17. THE MAJORITY OF PEOPLE OF WORKING AGE KNOW THAT THEY CAN VOLUNTARY CONTRIBUTE TO THEIR PENSIONS BY ALLOCATING MONEY TO PRIVATE PENSION FUNDS BUT VERY FEW DO THAT Do you know that you can voluntary contribute to your pension by allocating money to a private pension fund in order to get a supplementary pension in retirement? % working age people, N= 1098, 2010 Do you allocate (or plan to do it) money to a private pension fund in order to get a supplementary pension in retirement? %of those who know about this possibility

18. LACK OF TRUST RATHER THAN LACK OF MONEY OR INFORMATION MAKE PEOPLE REFUSE FROM USING PRIVATE PENSION FUNDS Why do not you want to contribute money to a private pension fund to get a supplementary pension? % of those who do not want to deal with private pension funds, multiple choicewith not mоre than 2 answers

19. Awareness of the state program of co-financing the retirement savings and willingness to participate in it

20. THE MAJORITY OF PEOPLE KNOW ABOUT THE STATE PROGRAM OF CO-FINANCING THE RETIREMENT SAVINGS BUT ONLY 27% CAN SAY THAT THEY KNOW IT WELL 73 Starting in 2009 it is possible to get a 100% supplement to your voluntary contributions to supplementary pensions if you contribute from 2000 up to 12000 rubles. Do you know about it? %, N=1098, 2010

21. EVERY SECOND OF THOSE WHO ARE ELIGIBLE FOR THIS PROGRAM APPRECIATE IT HIGHLY What is your attitude towards this program? %, N=1223 , 2010

22. NEVERTHELESS ONLY 22% ARE READY TO TAKE PART IN THIS PROGRAM Are you going to take part in this program? %, N=1223, 2010

23. THE DYNAMICS OF ATTITUDES TOWARDS THE PROGRAM AND WILLINGNESS TO PARTICIPATE – THE DECREASE OF OPTIMISM IN 2010, %

24. VERY FEW REPORT THAT THEY HAVE STRATEGIC GOALS AND EVEN LESS - STRATEGIES TO ACHIEVE THESE GOALS • %, N=1600, 2010

25. DISCUSSION It seems that in the life-long perspective Russians do not smooth consumption as the Life-Cycle Model (Modigliani) predicts. Why do Russians prefer workafter retirement and not savings? The idea of rationality is conceptualized not as a given inborn property of individuals but rather as a competence acquired through socialization in the presence of the particular type of social institutions: based on personal or impersonal trust. The lack of impersonal trust in financial institutions makes long-term financial savings for retirement impossible. That is why in life-cycle terms pensioners may compensate the loss of incomes by continuing to work after retirement or through sharing incomes in an extended family. Income smoothing rather than consumption smoothing. Could it be generalised to other institutional frameworks?