Russian government "is on the brink" of increasing retirement age in Russia from their extremely low Soviet-era levels, Prime Minister Dmitri Medvedev told Rossiya 1 TV channel on April 28, announcing the start of one of the most overdue post-Soviet reforms.

One the few advantages of living in the “workers paradise” was retirement ages were very low. Obviously a politically sensitive topic, the government has been loathed to increase them to international levels. But covering pension fund deficit has made the decision a necessity.

The government is proposing to increase retirement age from current 55 for women and 60 for men in a move that has been repeatedly flagged by the international and domestic analysts as a structural necessity, but has for years remained a taboo seen by Kremlin as toxic and unpopular reform.

"A serious inquiry has been done on the issue, and we are about to start to discuss [the retirement age] on the legislative level," Medvedev said as cited by Interfax.

The announcement also indirectly confirms previous reports that Medvedev is likely to remain in office and be nominated by President Vladimir Putin to head the next government. Unnamed government sources told Vedomosti daily that the cabinet will leave the final decision on the retirement age to the presidential administration.

The current retirement age of 55/60 years was set in USSR back in 1930's when average life expectancy was 40 years, Medvedev argued, while the daily reminded that most of post-Soviet economies have already hiked their retirement age.

Previously in 2016 the Finance Ministry suggested to hike the retirement age to 65 for both men and women with gradual increases of 6-12 months. The Central of Strategic Research (CSR) of ex-Finance Minister Alexei Kudrin, who reportedly is slated for an important post in the new government, urged to hike the retirement age for men to 65 and 63 for women by 2034. 

The pension fund deficit currently amount to RUB3.35 trillion ($53bn). In 2015 age pensioners amounted to 25% of Russian population and this number could grow to 50% by 2030, which would further increase the strain of covering pension deficits for the federal budget.

Pensions are also insufficient, standing at 35% of average salary in 2016, and forecasted at 31% by 2030, according to Vedomosti. Increasing the retirement age to 63 would increase the pension to 40% of average salary for a worker with 35 years of experience.