What is pension valorization and how to calculate the amount of accruals yourself? Valorization of pensions - what is it and why is it necessary? Valorization when calculating pensions

05.05.2024

Since 2010, a separate standard has described the procedure and principles by which the valorization of labor pensions is carried out; this makes it possible to change the provision of a citizen, taking into account the terms of work and salary values that characterize the period before 2002 (the moment of changes in conditions and the implementation of pension reform).

The purpose of valorization is revaluation, because today the calculation of provision for older people occurs differently and does not take into account the factors of the past. So, since 2002, the accruals have changed radically. Today, points based on contributions paid by the employer are taken into account. In view of the fact that before the start of economic reforms and during the Soviet period, insurance contributions did not exist in principle, a revaluation is necessary for the entire working period until the beginning of 1991.

Who is entitled to pension recalculation?

The valorization of pensions applies to everyone who was officially employed before 2002, with retirement at a later date. The process is carried out and controlled by the Pension Fund. But the procedure is automated, i.e. is of a non-declarative nature.

Employees recalculate based on the information available in the database for each. If an elderly person has papers that can affect the size of their pension, they must be submitted to the Fund. These could be certificates from work, copies of employment contracts, which the citizen did not mark during the initial appointment.

What is taken into account when calculating

During the procedure, all parameters are taken into account:

the amount of pension capital until 2002;
total time of employment until 2002;
length of service in Soviet times (until 1991);
Availability and size of individual points after 2002.

Differences by type of pension

Valorization is provided only for labor payments. This does not apply to state or social workers (disability).

The principles are different for each type:

pensions due to age: pension capital is taken into account;
survivor's pension: the pension capital of the deceased, who acted as the supporter of a relative;
military pensions: part of the insurance coverage purchased since 2008 is taken into account. (the part earned before 2002 includes civil service earned after leaving the service);
Chernobyl victims receiving early payment: valorization affects the insurance part of the available capital;
civil servants: revaluation of labor in old age, subject to its registration “for length of service”. The latter value is not adjusted due to the increase in the amount caused by valorization.

What is the algorithm for calculating pensions?

Of course, the Pension Fund re-evaluates and assigns the amount required for payment to everyone without accepting additional applications. However, it would be a good idea to understand the basic principles of calculations in order to calculate your collateral amount and compare it with the actual one. This way you can detect an error caused, for example, by the absence of some information in the Foundation database.

When determining valorization in 2017, the following rules apply:

The pensioner's capital is determined for the period before 2002.
It is subject to interest: 10% for having an official place of employment before 2002.
For each year that a citizen worked before 1991, 1% is added to the previous ones.

Example Having worked 15 years before the collapse of the USSR, 25% (10%+15%) is applied to capital. This means the pension increases by 25%. But, it should be noted once again that the pension capital is being valorized at the beginning of 2002. For the remaining period, coefficients are assigned in monetary terms. Points are multiplied by the price, which is approved annually by the Government.

The final amount is calculated using the formula: Pension capital * Interest (for length of service) * Total indexation coefficient / Waiting period for payments.

Valorization terms

The coefficient of all indexations carried out is 3.678 (the value remains unchanged). The waiting period is determined by the end date of the activity:

2002-2003: 12-12.5 years;
2004-2005: 13-13.5 years;
2006-2007: 14-14.5 years;
2008-2009: 15-15.5 years;
2010: 16 years old;
Etc., adding by year.

The procedure is designed to increase pension rights received before the new laws were established (taking into account points). Citizens who worked under the USSR for any time receive an increase according to the described algorithm. Valorization is aimed at increasing the provision of elderly people so that it does not fall below the minimum cost of living.

Pension payments depend on many factors - the total length of service of a citizen, the average salary, as well as the social and economic development of the state. After global changes in the pension sector come into force, a decision is made on the valorization or revaluation of pensions, since the accrual conditions change significantly, which means that traditional indexation cannot fully take into account all factors.

Definition - what is valorization of social pension in Russia

Valorization is a French term that came to the pension sector from economics. This is a rethinking of the monetary equivalent of pension rights that were acquired during the period of the previous pension system, for example, by citizens during the Soviet period. At that time, there were no insurance premiums and points, which play an important role in calculating pensions today. Until 2002, to calculate the amount of pension payments, only the average official salary for a certain period, as well as the total length of service, were taken into account. These two parameters formed the basis of the recalculation system. The program officially came into force on January 1, 2010, but is still relevant today.

The general meaning of pension valorization is as follows: the Russian Pension Fund has derived the amount of the estimated pension capital. It increases by 10% of the initial amount, and then by 1% for each working year until 01/01/1991. There are several important points in the pension recalculation program:

The monetary value of pension rights that were developed before 2002 is subject to revaluation;
Valorization affects, without exception, all citizens of the Russian Federation - current and future pensioners;
Promotions will vary depending on length of service prior to 2002. According to the Pension Fund of Russia, the pension will increase on average from 700 to 1300 rubles;
Valorization occurs automatically. There is no need to additionally contact the Pension Fund. If there are additional documents confirming earnings for the past period of time (before 2002), they should be submitted to the branch at the place of residence.

The main goal of valorization is to increase the standard of living of pensioners, since the cost of living changes annually, and it is also impossible not to take into account economic changes in the country over a long period of time.

Valorization began in 2010 and continues to this day. About 500 billion rubles were allocated from the country's treasury to recalculate pension accruals for the Soviet period.

The need to valorize pension payments

Until 2002, the calculation of pension payments in Russia depended on two parameters - the amount of wages for any five years and the full length of service. During the reform of 2013-2015. This list also included accumulated points during work, as well as insurance contributions by the employer. In this regard, citizens who retired before the new provisions came into force suffered a significant loss in the monetary amount of their pension payments.

Indexation, the task of which is to recalculate pensions taking into account inflation and the level of the cost of living, cannot take into account the specifics of calculating pensions. Therefore, a mass valorization program was announced, which officially began in 2010. A particular increase in pensions was felt by those citizens who had significant work experience before 2002, but for other people the increase was not so significant, since the increase is automatically included in the calculation of payments upon retirement.

Find out how much work experience you need to retire.

After 2015, indexation of pensions is still carried out annually, but there is no need for mass valorization, since the pension system has not changed fundamentally.

Differences between indexation, valorization and recalculation

Despite the similarity of the concepts, they are used simultaneously and have completely different meanings. The similarity of this terminology is its use when increasing pension accruals, but their legal basis is different.

. This is the procedure that is necessary to change the pension value index. It allows you to calculate the compensation of the purchasing power of a citizen receiving any type of pension to the level of inflation in the country. The indexation value is set by government agencies and is necessary to bring the pension closer to the amount of the current consumer basket;
Valorization. Increasing the size of the pension payment, which was lowered due to changes in the country’s pension system. The latest valorization program in Russia concerned pensioners with work experience during the Soviet era, as well as up to and including 2002;
Recalculation. A procedure that is necessary if any circumstances have changed that affect the amount of the pension. To do this, you always need to submit documents confirming the current changes.

Read about indexation of military pensions.

All information about current changes in pension payments for all three types of pension increases must be obtained from the Pension Fund at your place of residence.

Rules

The calculation of pension capital is carried out by employees of the Pension Fund, but if you take into account the basic rules for the valorization of pensions, you can roughly imagine whether you should even hope for any payments under the recalculation program. Key points that are taken into account when valorizing:

All citizens who had work experience during the Soviet period receive a one-time increase in pension capital by 10%, and every year after 1991 there is an increase of 1%;
Valorization is individual in nature, as it directly depends on the time of retirement and age. Up-to-date information can be obtained from employees of the Pension Fund;
The increase in the pension amount is affected by all indexations carried out in recent years;
If there are circumstances affecting the length of service in previous years, and you also have all the necessary supporting documents, you must contact the Pension Fund branch to recalculate your pension. In all other cases, valorization is carried out automatically.

You should not expect a large increase in the size of the pension; on average in Russia it increased only by 1,430 rubles per month.

Concepts used in calculation and recalculation

There are two important parameters that apply to any changes in the pension amount:

Conversion. This is the conversion of pension rights into cash equivalent according to a certain formula. In this case, all work activity before 2002 is taken into account;
Work experience coefficient. The entire period up to 2002, when the citizen was officially employed, is taken into account. The maximum value of the coefficient can reach 0.75. If you have worked for 25 years, then its value will be equal to 0.55, and then 1% is added for each year, and with less length of service, 1% is proportionally subtracted.

Read also what documents are needed to recalculate your pension.

The resulting value of the pension capital can only be calculated approximately, since it is difficult to independently substitute the most correct values. For an accurate calculation, you must contact a Pension Fund employee.

Example of recalculation of labor pension

As of January 1, 2002, the citizen had a total work experience of 29 years, of which 21 years were during the Soviet period. Its average salary exceeds the national average salary for that period by 1.27. The estimated size of her labor pension is 1283.3 rubles, and the length of service coefficient is 0.64 (0.55 for the base 25 years of experience and 0.09 for subsequent years), and the waiting period for pension payment is 156 months. Thus, the size of the pension capital, taking into account valorization, will be 129838.3. The final amount of the pension is not equal to the pension accumulation, therefore the pension supplement is calculated taking into account the total indexation coefficient of the estimated pension capital, as well as the period of expected payments. As a result, the size of the labor pension will increase by 950.25 rubles.

Find out what the minimum pension size in Russia is.

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conclusions

Valorization of pensions is an integral process of the pension system, which is important for improving the financial situation of pensioners and aligning the size of payments with the cost of the food basket. The recalculation of pensions is based on several factors, among which the most important are the total and average monthly wages. To accurately calculate your pension for the current period, you must contact the Pension Fund.

It is unlikely that any pensioner has heard of such a term as “pension valorization” or knows what it is. So that citizens can freely operate with complex concepts and understand what employees of the Pension Fund and other departments are talking about, it is worth talking in detail about this phenomenon, giving it a definition and explaining for what purpose this word was introduced in the first place.

To understand what pension valorization is, it’s first worth giving an accurate translation of this concept. The term means revaluation and is used in economics to refer to an increase in the value of certain goods and services. In the pension system, the term was introduced not so long ago and began to be interpreted as an assessment of the state-guaranteed pension rights of insured persons in connection with the increase in pension rights until 01/01/2002. Today, such an important event is envisaged not only for people of retirement age, but also for citizens planning to retire in the current period or in future years.

Valorization of pensions: what is it and what is the essence of the process?

Valorization of citizens' pension rights is important for the general procedure for calculating state benefits. The essence of the process is that on the above date, the pension fund established the exact amount of the estimated capital for the insured persons. For each subsequent year of work experience, until January 1, 1991, capital increases by 1% and by 10% in the general manner. The duration of the general labor period is determined using special documents and for each citizen the conversion of pension rights is carried out on an individual basis. The conversion rules provide for taking into account the stages and periods of any socially beneficial activity. There are no restrictions in this direction.

After preparing and submitting additional documents confirming your total work experience, all that remains is to correctly formalize the increase from valorization. In fact, the assessment of the pension rights of citizens does not require the submission of a special application and is carried out without application, however, the provision of documents confirming the total length of work experience is mandatory, because the recalculation will be made on the basis of papers in the citizen’s personal file.

The personal presence of a pensioner may be required only when he himself wishes to submit to the Pension Fund additional papers about periods of labor activity that were not previously confirmed and not taken into account when calculating pension benefits. Assessing the pension rights of insured persons is especially important for men and women who worked for about 45/40 years in Soviet times. It was this length of service that was considered the maximum possible for the assignment of compulsory benefits.

An important addition is that about 500 billion rubles from the state budget were allocated for the conversion of pension rights of insured persons. The main reason for this decision was the need to improve the standard of living of older people. In recent years, assessments of pension rights have been carried out regularly for all citizens who have retired. Calculations are carried out by Pension Fund employees once a year and for this purpose, information entered into the department’s database in relation to each retired citizen is used.

What is pension benefit valorization and why is it necessary?

In the compulsory pension insurance system, the key date for calculating the amount of the required benefit is 2002. It was during this period that payments were calculated based on the following indicators:

any 5 years of work experience, when wages were accrued and paid, as well as all mandatory contributions to the Pension Fund. The specific period is determined by the citizen himself;
full work experience acquired before 2002.

After the specified date, it was decided to include in the list of parameters the amount of contributions made by the employer. The system operated in this form until 2014. At the next stage, a new concept was adopted - IPC (individual pension coefficient), characterizing the number of accumulated points for a specific period of work.

At one time, an assessment of the pension rights of citizens was carried out and the results obtained confirmed that older people who retired before 2002 lost significantly in the amount of benefits. In order to equalize the current size of the fund, in order to calculate the required benefit, it was decided to valorize the amount of the estimated pension capital.

After the corresponding law was adopted and the pension rights of the insured persons were assessed, the capital of today's pensioners and future ones began to grow. People who had significant work experience before 2002 began to notice a significant increase. The time not taken into account when converting benefits in the periods 2010-2014 was also taken into account, however, such persons did not notice any significant increase, since it occurred automatically and was immediately included in the benefit.

To summarize, we can say that all elderly citizens, starting from 2015, who were in official labor relations and had a certain length of service before 2002, have the full right to conversion and valorization of rights.

Rules for the procedure

As we have already noted, the conversion of pension rights is carried out by Pension Fund employees and only for citizens who have the opportunity to determine their length of service.

Citizens are given the opportunity to independently determine the amount of the increase and roughly imagine whether they can even hope for an increase in payments. For information, it is worth noting that on average, by region, the amount of valorization is about 1,430 rubles monthly. At the same time, each case is individual in nature and only a correct assessment of pension rights will make it possible to accurately determine the amount of the increase and the valorization coefficient. An important indicator is the age of retirement. In this case, valorization is carried out taking into account the following individual indicators. The procedure for preserving and converting previously acquired work experience provides for taking into account all periods of socially useful activity, the past year.

Formula and indicators

To reassess, you will need to visit the Pension Fund office and submit a standard application. When recalculating, terms such as length of service coefficient are used. In this case, we are talking about an indicator that is formed for the entire period of work until 2002. The coefficient is equal to:

with 25 years of experience - 0.55 - 0.75%;
with more experience - 1% is added for every 12 months, up to a level of 75%.

As an example, here is a small calculation:

For example, a person retired with 32 years of work experience. The entire period occurred in Soviet times and an old-age pension was assigned to a person in 1993. During this time, he worked for only 2 years, which is supported by documents. After the revaluation, his capital was increased by 10% and 31% (since the recalculation is carried out for length of service before 1991), a total of 41%. Another 2% was added to this figure for years worked after retirement. As a result, the citizen’s pension will be recalculated taking into account the resulting figure of 43%.

The main conditions for revising the benefit are:

year of birth of the citizen;
insurance period;
salary ratio in different periods of employment;
year of retirement;
average salary after 01/01/2002.

To be able to independently calculate the increase, you can use the following formula:

PC = (RP - warhead)*T, where

PC – capital for calculating benefits;

RP – payment amount;

BC - the basic part of the benefit, which as of January 2002 is 450 rubles;

T – payment period.

As a result of substituting the available data, the citizen will be able to calculate the amount of capital that will be used when calculating his pension.
In conclusion, we can say that valorization is a necessary procedure that will allow many pensioners to receive increased benefits. Its implementation will also help balance the situation associated with the difference in payments to people who retired in different periods.

Since 2010, a new system for calculating pensions has been introduced; this innovation is called valorization. The term refers to a service pension, which increases the amount of pension payments.

The system is based on a recalculation of the amount of salaries received and the duration of work, but the period up to 2002 is taken into account (during this period the pension reform was introduced). Essentially, valorization is an increase in the payment of a pension, which is due once and is valid for persons who worked before 2002.

What is it - pension valorization

The purpose of introducing valorization is to change the assessment of past factors that were not taken into account in previous conditions. Thus, starting from 2002, the principle of calculating accruals has changed sharply and clearly. Thus, today points are accepted for calculation, which are formed on the basis of funds paid by the employer.

It must be taken into account that before the implementation of reforms in the economic sphere, during the period of Soviet power, the principle of insurance contributions did not exist at all. On this basis, all work experience that occurred before 1991 was revalued.

The valorization of pension payments applies to a greater extent to all people who acquired experience before 2002, but retired after this mark. The Pension Fund is directly involved in the control of valorization, and pension recalculation is also carried out here. The procedure itself does not require drawing up an application, as it is performed automatically.

For recalculation, the information contained in the database is used. This basis in most cases is sufficient to assess the level of pension that will be paid today.

However, if a person receiving a pension has any papers that could affect the recalculation of the amount of payments, he must present the documents to the Pension Fund.

Such papers may include: extracts from the place of previous employment, photocopies of employment contracts, as well as other notes that were not stated during the initial calculation.

The video shows a description of pension valorization:

When calculating pension valorization, the following factors are taken into account:

The amount of pension capital that was received before 2002;
Total duration of employment until 2002;
Having experience during Soviet rule, that is, before 1991;
Number and availability of accrued individual points received after 2002.

Valorization concerns only payments that are made in accordance with the labor pension. This category does not include government payments and social benefits (disability, child care, etc.).

Worth considering! To understand the accrued amount of the pension, as well as, it will not be superfluous to understand the principle of how valorization is carried out and what coefficients form the basis.

In the realities of 2017, the following rules are used to calculate valorization:

The amount of pension capital that was acquired before 2002 is calculated;
10% is added to it if there is official employment in the period before 2002;
For each year that a person was engaged in labor activity before 1991, an increase of 1% is added to the previous ones.

To make the information presented clearer, consider an example calculation:

Also worth considering. Let’s assume that a person worked for 15 years before the collapse of the USSR, that is, the start of work is in 1976.
So a fixed 10% and 1% for each year are added to the capital, that is, 10% + 15% = 25%. Thus, the pension amount increases by 25%. The pensioner received a labor pension in 1985 for old age.

The employment file contains records that the person had officially worked for 41 years by the time the pension was granted. Subsequently, the person worked for another 10 years from 1991 to 2002. Starting from the first day of 2010, a woman’s pension capital increased by an additional 10%, and we also add 46% for years of work experience during Soviet times. In total, the increase in pension capital, at , is 56%; based on this figure, the labor pension will be recalculated.

Only pension capital that was received before 2002 is subject to valorization. In the period after this mark, the pension assignment corresponds to the cash equivalent of the capital. In the future, the person is awarded points that have a certain value.

Ultimately, the amount is calculated according to the formula:

Capital accumulated thanks to pension contributions * Interest received due to length of service * Indexation coefficient, which has a total form / Duration of waiting for payments. Find out what payments are due after the death of a pensioner.

The period of valorization, that is, the expectation of payments, depends on the date of termination of employment. In this case, the coefficient is taken into account for indexing. The coefficient does not change and is 3.678.

Depending on the length of the waiting period, the period is:
2002-2003 – 12 years;
2004-2005 – 13 years;
2006-2007 – 14 years;
2008-2009 – 15 years;

2010 – 16 years.

All periods have a range of six months, that is, writing 15 years means 15-15.5 years.

Similarly, you can continue the calculation with an increase of 1 year.

In modern realities and in monetary terms, it was determined that the average increase for a pensioner was 1,431 rubles/month. The largest increase is for pensioners who have reached the age of 80 or more, so their pension was increased by approximately 1,700 rubles. Find out whether study is included in your work experience.

The valorization of pensions is intended to improve the standard of living of pensioners who worked during the Soviet era and the first 11 years of the formation of independent Russia. The need for this is due to low income and the inappropriate level of salary indexation with real prices in the country. Read who is entitled to unemployment benefits.

Valorization denotes overestimation. This concept is used in economics when prices for services and goods increase or decrease. In the pension system, valorization - recalculation of pensions and pension rights, before the start of the 2002 reform.

Until the beginning of 2002, when revaluing pensions, two indicators were taken into account: the average salary during work and the total length of service. From the beginning of 2002, the size of pension payments began to depend on insurance payments to the compulsory pension system.

How pension valorization is done

Revaluation of pensions is done by the Pension Fund of Russia. The calculation takes into account information about the length of service before and after 2002. The conditions for recalculating cash payments may change annually from about the entry into law of new rules and requirements.

For valorization the following factors influence:

The amount of pension payments until 2002.
Total work experience until 2002.
Work experience in the USSR (up to 1991 inclusive).
Availability of additional benefits received after 2002.

The revaluation scheme is as follows: pension until 2002 x 10% + 1% for each working year until 1991. The diagram shows that for each pensioner, valorization is calculated individually, taking into account work experience, salary level and age.

Valorization carried out by the Pension Fund without fail. Therefore, a written statement from the citizen and his presence during the procedure are not required. Valorization is carried out annually, so the amount of the pension may change.

Pension payments are recalculated in automatic mode. It applies to both older people who have already retired and citizens who are just about to retire.

A person’s presence at the revaluation procedure is only necessary if not all data was taken into account and the calculation was made incorrectly. To confirm the shortcomings, a person must submit the necessary documents to the Pension Fund.

On a note: On average, increases vary from 500 to 2000 rubles. The amount of the increase depends on the length of service and the time of retirement.

For citizens living in the Far North, increased coefficients are provided for calculating pensions. The amount depends on the region and varies on average from 1.5% to 2%. Typically, one year of work in the north is equivalent to 1.5 - 2 years of work under normal conditions.

Why is valorization needed?

Until 2002, pensions were recalculated taking into account two indicators:

Average salary for 5 years (you can select individual years).
Total work experience.

With the advent of the new year, VAT contributions from the employer were added to this list. This system worked until 2014, and already in 2015 another innovation appeared - IPC. Bonuses are accumulated for a person for length of service when working in enterprises of particular complexity.

Statistics show that due to lack of insurance premiums Until 2002, citizens' pensions were minimal. In order to somehow improve the quality of life of older people and increase pension accruals, insurance premiums and the accumulation of special points were introduced. All calculations and tariff rates can be clarified at the Pension Fund.

As a result, in The Federal Law of the Russian Federation has been amended in carrying out valorization. Since 2010, pension capital began its rapid growth. Changes could already be noticed at the beginning of 2012. A significant difference was noticed in the pension payments of pensioners with more than 30 years of experience.

A significant change for the better was noticed by citizens whose work experience was more than 10-15 years before 2002. People who became pensioners from 2010 to 2014 did not notice significant differences, since the increase in payments took place automatically.

Since 2015, significant amendments have been made to the Federal Law. However, no changes in valorization were noticed. All pension rights remain unchanged. That is, pensioners with a minimum work experience before 2002, have the right to apply for increased pension payments according to the Federal Law of Russia.

Rules for valorization

Revaluation of pension capital is done by employees of the Pension Fund. If desired, any Russian citizen can do this on their own to find out if there is a chance of increasing their pension by 1-2%.

All information about pension payments, length of service, etc. located in the PF database. For people who worked during the USSR, their total length of service until 2002 is multiplied by 10% once, and subsequently 1.5-2% is added for each year of service since 1992.

On a note: On average, according to statistics in the Russian Federation, pensions increased by 1,435 rubles.

Pension fund regularly recalculates pension capital, taking into account the person’s length of service and insurance payments.

To find out whether it is possible to increase your pension and whether there is a chance to receive social benefits for your work experience in the USSR, you need to contact the Pension Fund and ask to recalculate pension payments. If desired, each citizen can do this independently.