The state is currently managing more than 90 percent of Russians’ pension savings. A pensioner counts money after paying for public utilities .
Photo: Ivan Makeev
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Pension Savings Flow to Private Funds
The number of contracts with private pension funds has doubled by June compared to the figures last year, the Russian Pension Fund said Wednesday in a report. Those in the market calculated that the state may thus lose up to 18 billion rubles in pension savings this year.
74 state-registered private pension funds signed some 200,000 contracts on pension insurance before June 1, compared to 81,000 last summer, the Russian Pension Fund reported. Last year, more than 1.2 million people opted to enter the private pension sector.
Up to 6 percent of the money which comes to the Russian Pension Fund from tax payments stays in the saving system, under the pension reform. Pension savings of those who have not chosen to use services of private firms are to be invested in state securities. The state is currently managing more than 90 percent of Russians’ pension savings.
Experts predict the number of those who opt for a private pension fund to exceed 20 percent by the end of the year if the current growth persists. “According to estimates, the number of contracts [with private pension funds] will triple, compared to the last year,” says Vitaly Plotnikov, president of First National Pension Fund. “Private pension funds may thus receive from 15 to 18 billion rubles of pension savings for their management.
Those in the market note that an increasing number of Russians are choosing private pension funds at the background of heated discussions of the pension reform which is still underway. In January, the Health and Social Development Ministry suggested scrapping the saving part of the state pension system by 2013. Later, President Vladimir Putin asked the government to draft ways to encourage voluntary deductions to the pension system.
Analysts estimate that the current upward trend in private pension funds may raise the share of those with pension savings in private funds up to 50 percent within the next five years.
www.kommersant.com
All the Article in Russian as of June 28, 2007
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