Russia’s Finance Ministry and the Central Bank plan to present a draft of a new system of voluntary pension savings in the near future and the system may be launched from 2018, Minister Anton Siluanov said.
Earlier, the government froze the accumulative part of pension savings for 2014 and 2015, and used 6% of citizens’ payments for the accumulative part to pay pensions of current retirees. In December 2015, the measure was prolonged for 2016 in order to gain 342.2 billion rubles for the budget.
“Next year we do not plan to restart the old system of citizens’ (pension) savings that we had three years ago, it is true”, Siluanov said. “We must create all necessary conditions so that employees who want to have a decent pension in the future could have a set of tools for investments while they are working, in various instruments”, he said.
The new system should allow employees to invest pension savings in the accumulative part of pensions, in banking instruments, or in property, and should allow for spending of part of pension savings before retirement, he said.
“I think that during this year and next year we will find optimum ways for development of the savings system and I hope that we will be able to launch it from 2018”, Siluanov said.
Deputy Economic Development Minister Oleg Fomichyov said that the ministry had offered to partially unfreeze pension savings in 2017 and to start allocating the 6% payment to form the mandatory part of savings, or at least work out an interim option of starting to transfer 1% of the payment and then gradually increasing it to 6%.
“Taking into account the situation, we think it is the only option that will allow us to keep the accumulative part of pension savings under current harsh budget restrictions and to develop it in the future assuming the (6%) tariff return in one or two years”, he said, adding that unfreezing of 1% of the payment would need a 65 billion ruble transfer from the budget to the Pension Fund.
The Central Bank’s Chairwoman Elvira Nabiullina said the accumulative part of the pension system was very important as it was a source of long money in the economy. The central bank as a regulator had been cleaning the sector from bad non-government pension funds and implemented a system of guaranteeing of pension savings, so the funds were ready to reliably protect rights of citizens, she said. (Prime/Business World Magazine)