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25 Aug, 2020 21:18

Money for 'dead souls': In echoes of Gogol-era, Russia’s pension fund pays out millions of dollars to deceased citizens every year

Money for 'dead souls': In echoes of Gogol-era, Russia’s pension fund pays out millions of dollars to deceased citizens every year

What would Nikolai Gogol make of this? The Pension Fund of Russia is paying out billions of rubles in pensions to the dead, enabling their relatives to withdraw and use the funds, according to the National Accounting Chamber.

In the famous 19th century novel, chronicling the wanderings of Pavel Ivanovich Chichikov, the plot relies on "dead souls" (or deceased serfs) which are still accounted for in property registers. Now almost two centuries on, something similar continues in modern Russia. 

The Chamber revealed that the pension fund is often late to receive notice of a citizen's death, leading to payments still being made. Some relatives are then able to withdraw the money, and spend the wrongly-awarded cash.

The audit for 2017-2019 revealed that it had overpaid 377 million rubles ($5 million) in just two regions of Russia – each region in the country has it's own branch, and there are 85 in total.

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Despite sending out money that shouldn't have been distributed, it is difficult for the government to retrieve falsely appropriated funds. Any request to return money must be made through the courts, or with the recipient's voluntary consent.

The audit also discovered some other flaws in the pension system, including people having multiple accounts.

The Russian Pension Fund was founded in 1990, and is responsible for a wide range of social security payments, such as benefits to mothers of multiple children, known as 'Maternity Capital.'

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In July, Moscow newspaper Izvestia reported that the Ministry of Finance had a plan to seize illegally held assets and give them to the Fund in order to help reduce its massive deficit. According to Valentin Shurchanov, a member of the parliamentary committee on Budget and Taxes, the Russian Pension Fund is currently round 650 billion rubles ($9 billion) in the red. 

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