 a good indication of the challenges that will face the Russian pension system. The chart below shows the dynamics of the upcoming changes in the ratio of those who pay pension contributions to the pension system (people of working age ) and those who receive pensions. In various scenarios, this ratio decreases equally from the level of 2.5 today to around 2 by 2022, where it should remain for about 10 years, before dropping further to about 1.6 by 2045 (Chart 4).
Chart 4. Working Age to Above Working Age Population Ratio in Russia: Three Scenarios
This data shows that the expenditure pressure of the distribution pension system will increase and will require Russian authorities to accept either an increase in payroll taxes, an increase in federal subsidies to the pension fund, an increase in the retirement age, or a decrease in the real size of pensions, or some combination of all of these measures.
As with many economic processes, it is not possible to change direction or speed overnight. Demography is one of the most inertial factors—the number of people born in a certain period cannot increase during the life of the generation—that makes demographic forecasts more reliable than any others. Rosstat’s forecasts demonstrate that, regardless of who leads the country, Russian economic policy will face the very serious threat of rapid depopulation in the coming decades. To maintain the current population of the country (the “current-level” scenario), Russia needs to encourage a large-scale immigration influx, more than 12 percent of the current population. But even this will not entirely offset a rapidly ageing population and growing fiscal pressure on the pension system. All that will make the Russian economy less competitive and less attractive, and if Russia continues to follow an isolationist policy, it may face its own, labor-based, secular stagnation.
 During World War II, the Soviet Union lost 26.6 million people—13.7 percent of the population—while a decline in fertility during the war demographic may led to further losses of 8-10 million. Despite 70 years having passed since the war, this damage to the demographic pyramid has not been repaired.
 It is worth noting that this ratio (2.6 or 1.6, for example) is not absolutely correct as Rosstat includes labor migrants in the overall labor force while significant number of foreigners are not contributors to the Pension system.