Enjoy your 5-year retirement, comrade

Vladimir Putin has promised Russians that he will make retirement richer. What he didn’t say was that he’s also going to make it shorter.

Russia plans to raise the retirement age for men by five years to 65, and for women by eight years to 63, according to two people familiar with the plans, who spoke on condition of anonymity. The changes could begin as early as 2019, phasing in over five years or more.

The current ages are among the lowest in the developed world, but Russia also lags in life expectancy, especially for men, currently 68. By 2024, when the pension-age increase could be fully imposed, Government forecasts put life expectancy at only 70 for men and 80 for women. The resulting five-year average retirement period for men would be among the shortest in the developed world.

Officials say the long-awaited but politically unpopular change is vital to rein a ballooning funding shortfall for the Government pension plan as the population ages and to encourage Russians to work longer.

With the working-age population forecast to shrink over the coming decades, the burden of paying pensions could force either major increases in taxes and Government borrowing or cuts in payouts, which now average only about a third of wages.

But the Kremlin has for years put off changing the system for fear of a backlash, especially among the older voters who are a key constituency of President Putin.

As many as a third of Russians retire early, thanks to special benefits for the military and police, as well as professions ranging from miners to dancers.

“We need to make a decision on the pension age,” Prime Minister Dmitry Medvedev told parliament last month. “The existing framework was set a long time ago — the 1930s, when the life expectancy was about 40 years. Life in the country has changed since then.”

Reducing the retirement period would also help offset the forecast shrinkage of the workforce as Russians age, one of the main obstacles to faster economic growth. If current trends continue and no changes are made to the pension age, the working-age population will shrink by 4 million over the next six years, while the ranks of pensioners will increase by 3 million, according to Gazprombank.