The transition to a market economy led to reforming old-age pension schemes in Russia. The government was forced to launch reforms owing to the chronic problems with collecting firms' contributions to old-age funds and paying out benefits. An extrabudgetary pension fund was created : the State collects contributions, and local agencies of the Ministry of Welfare, as well as financial institutions and banks, distribute the benefits. This system has been plagued by difficulties, due in particular to the 1992-1993 hyperinflation, and pensions are often paid late. The introduction of a individual pensioner's card should make it clear what has been paid and what are the costs by linking benefits to contributions. To balance old-age funds, the retirement age has been set five years later. Elements of a capitalized insurance scheme are in the works for funding early retirement.
