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Friday 17.11.2017 | Name days: Uga, Hugo, Uģis

Decline of Russian rouble adversely affects pensions of Russian citizens living in Latvia

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Baltic news, News from Latvia, BNN.LV, BNN-NEWS.COM, BNN-NEWS.RUIn November, income of Russian pension recipients declined by 15%. An even larger decline is expected at the beginning of 2015. Pensions are expected to decline by half in comparison with summer 2014.

There are nearly seven thousand pensioners in Latvia who receive Russian pensions. Russian authorities calculate pensions once every three months and transfer them to Latvian Social Insurance Agency. The agency then transfers the money to recipients. The last time Russia had transferred pensions in November. The value of Russian rouble had declined by 15% in comparison with euro, as reported by Nekā personīga programme.

«We receive pensions for nearly seven thousand pensioners in Latvia. This money is transferred once per quarter, per three months at a time. We are mediators in this process – we process the money and information regarding pensioners. We see that the currency rate has declined in Q4. It can be said that pensions have become smaller, even though the size of pensions in Russia has not changed,» – says representative of Latvian State Social Insurance Agency Baiba Felsberga.

Pensioners who received EUR 153 in August were paid only EUR 129 in November.

Russian pension law seems attractive to some people. For example, women can retire at the age of 55. With that, Russian pensions have become larger for work experience since 1990 this summer. This is why some Latvian citizens have applied for Russian citizenship. This was also previously noted by Russian ambassador in Latvia Aleksandr Veshnyakov this spring. Now he denies giving any encouragements to Latvian non-citizens. He adds that such a decision is personal responsibility of every person.

«First of all, we have never encouraged anyone to apply for Russian citizenship. It has been chosen by people who thought it was necessary for them due to one reason or another, including economic reasons. It was their choice. With that, it is wrong to accuse Russia in giving encouragements to Latvian citizens and non-citizens to accept Russian citizenship. Secondly, I do not exclude the possibility that in an exceptional situation – what we see now is most definitely and exceptional situation – Russian authorities will carefully consider different solutions,» – said Veshnyakov.

This spring, Latvian Welfare Minister Ilze Vinkele urged residents not to rush the possible change of citizenship, adding that neither the Russian pension system nor the Russian economy is stable.

According to information from the programme, some disappointed Russian pensioners have started to consider options of returning to Latvian pensions. This, however, is only possible if they become citizens again and go through the naturalization process. They will not be able to become non-citizens of Latvia again.

«Over the past several years we have noticed that 3,000 non-citizens annually choose citizenship in other countries. In 95% of these cases they choose Russian citizenship. We have noticed that non-citizens aged 55 or older choose Russian citizenship more often, because this provides them with the opportunity to receive Russian pension,» – explains the head of Naturalization Office Igor Gorbunov.

Residents whose pensions are partially paid by Latvia and Russia are in the best situation, all things considered.
As mentioned by Veshnyakov, Russian legislation does not provide coverage of losses caused by currency exchange rate fluctuations. Pensions will be indexed in accordance with annual inflation, which, according to estimates, will be 9%.

According to Swedbank economist Martins Kazaks, Russian rouble will continue to decline: «Declining oil prices also pull down rouble’s value, which adversely affects benefits, pensions, income and purchasing power of Russian residents. As for Latvian residents who receive Russian pensions, their purchasing power will sharply decline of rouble’s value drops by half,» – says Kazaks.


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