The main problem is that neither the state nor citizens can actually use the pension savings. The state cannot direct the money to funding current pensions; the citizens cannot withdraw it and invest.

Another reason for pension troubles are low salaries: more than 80 per cent of those with state pension insurance spend all their money on basic necessities. Currently, there are 7.5 million people participating in certain pension programs. The remaining 50 million, who cannot save up because of low salaries, risk ending up with a pension of 25 to 30 per cent of salary provided by the state.

In order to change the situation, the Ministry of Health and Social Development suggests making the pension savings – normally paid by an employee every month – voluntary, privatize them and transfer it to non-state pension funds.

Beginning in 2011 there are plans to divide the portion every employee puts aside for the future between the Pension Fund of Russia and non-state pension funds. As far as the second part is concerned, citizens will be able to change the conditions of investing and to regulate the way the pension is paid – for example, they will have the possibility to withdraw all the savings at once or to leave it as a heritage.

The ministry also suggested freeing employees earning below average from taking part in the scheme. They will still receive the state pension.

Experts, who strongly disapprove of discussing such an important project behind closed doors, say that the idea of the Health Ministry is an attempt to cover the State Pension Fund’s current deficit at the expense of those who receive their pension in the future.

They suspect that the state failed to manage last years’ pension investment program and did not do anything to improve the situation.

Russia is not the only country now facing a range of serious problems with pensions. Recently, radical pension-cutting measures were introduced in France, causing a nation-wide protest. A similar austerity package was introduced in the UK by the new government.