A Testing of the Financial Sustainability of the Russian State Pension System in a Long Term

The Russian pension system has undergone major structural changes over the past few years. After the reform in 2015, the system now consists of two pillars: a mandatory pension insurance and a voluntary retirement savings instead of the three-pillar pension system model as before. Based on the actuarial model, this thesis examines the financial sustainability of the reformed pension system with a specific focus on the mandatory pension insurance part. First, the thesis discusses key features in the actuarial forecast model of the pension development in Russia. The outputs of the actuarial model include the number of pensioners, the contribution and the pension payment in the Russian pension system for the period from 2015 to 2030. Specifically, the number of pensioners is predicted to be increased significantly in the long term as a result of the aging population. Also, both the total contribution and the total pension payment are expected to steadily increase in yearly basis. However, the deficit of the Pension Fund of Russia will not be improved in the long term if there is no change in the legislation. Keywords: Pension Fund, financial sustainability, deficit, reform, actuarial modelling, forecasting.