Russia pension reform ‘a threat to country’s fledgling financial markets’

Russia is paying a heavy price for having one of the lowest retirement ages in the world (photo:dpa)
Russia is paying a heavy price for having one of the lowest retirement ages in the world (photo:dpa)

Russia’s government is ‘seizing’ funds from private pensions for investment in a move many analysts perceive as desperate as the Kremlin tries to plug a growing hole in the state’s budget. The government is scrambling to find sources of income to help it fulfill spending pledges made by President Vladimir Putin while the economy struggles with low growth amid weak investment.

<i>Russia’s pension system is in crisis. A recent move to sequestrate private pension contributions reflects a growing desperation by the Kremlin over how it can plug a huge and rapidly widening hole in the state pension fund. The Kremlin is clearly fearful of antagonising the country’s 40 million pensione...

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