Funded pension in 2020: design and innovations

The deputy explained the dangers of refusing the funded part of the pension

The proposal to abolish the funded part of the pension for mandatory pension contributions is correct, but not in the form in which it has been received now. This was stated by Deputy of the Legislative Assembly of St. Petersburg Oksana Dmitrieva. In her opinion, you first need to decide what to do with the money you have already accumulated.

“All calculations and actual results proved that the return on the funded part of the pension is significantly lower than the indexation on the insurance part,” the parliamentarian noted. — At the same time, let’s once again record that citizens’ mandatory contributions to the funded part of the pension were lost, and if they were not lost, they were devalued. Let me remind you that since 2014, citizens have not made mandatory contributions to the funded part of pensions; for some reason this was considered a “temporary suspension” of contributions to the funded part of pensions; everything went to the insurance part. It would seem that a rational proposal was made. But I believe that in the form it appears today, it is fraught with consequences and even dangerous.”

Dmitrieva recalled that from 2002 to 2014, citizens made contributions to the funded part of their pension.

“What kind of money this is, where it goes, no one understood. Everyone paid 22% to the Pension Fund, but they didn’t think about where the insurance part was, where the savings part was. But over 12 years, huge funds have accumulated partly from VEB (the state management company), and partly from non-state pension funds. At the same time, the citizens who made the contributions do not remember about them, and for some reason management companies are in no hurry to remind them that this money exists. And that this is 2 trillion rubles,” she said.

The deputy emphasized that no one clearly states what to do with this money. In this regard, the proposal to abandon the funded part of the pension is “a real opportunity to lose them, or rather, to give them away to someone.”

“Therefore, abandoning the funded part is possible, and this is the right decision, but only after the algorithm has been fixed, a number of transitional provisions have been written down and prepared, where it is imperative to clearly establish what we are doing with the two trillion rubles that citizens have contributed over the course of 12 years for the funded part of the pension,” she added.

The parliamentarian is confident that the best solution is to transfer these funds to the insurance department and re-index pensions.

“Only then will this money not be lost. And citizens who want to “play hoarding” with non-state pension funds can do this, but must clearly understand the consequences of their own, exclusively voluntary, decision,” Dmitrieva concluded.

What is a funded pension and why do they want to cancel it?

MOSCOW, October 1, FederalPress. In Russia they want to abolish the funded part of pensions. What is the funded part of a pension and who benefits from its abolition - in the FederalPress material.

The Federation of Independent Trade Unions of Russia (FNPR) sent a letter to Prime Minister Mikhail Mishustin, in which it advocates the exclusion of the funded component from the state compulsory pension insurance system.

What is the funded part of a pension?

The funded part of the pension appeared in 2002, when the pension system was divided into two participants: the state and business. Thus, part of the contributions was directed to individual accounts of Russians, which were managed by state and private pension funds.

Who is entitled to a funded pension?

76.8 million Russians have funded pensions; currently there are about 4 trillion rubles in the funded system.

Pensioners have been paid pension savings since 2012. As a rule, the amount of payment is low compared to the amount of the basic pension and averages 956 rubles. per month. The average amount of urgent pension payment to participants in the pension co-financing program is 1,705 rubles. per month.

What is a funded pension made up of?

There are several sources of pension formation.

Insurance premiums. In accordance with the law, each employer pays contributions to the pension fund for an officially employed employee. Their size is 22% of wages. If the employee wants to pay the funded part, then 6% will be allocated to it.

Maternal capital . A woman who has given birth to two or more children can use the funds for the funded part of her pension.

Participation in the co-financing program. This is a government program under which citizens could deposit a certain amount of money into their account at the Pension Fund, which was subsequently doubled by the state. However, the program closed in 2020.

Voluntary transfers . Russians themselves can choose a non-state pension fund and transfer money there.

The amount of the funded pension is calculated according to the following formula:

Here's how you can calculate your pension: for example, you have accumulated 800 thousand rubles in a non-state pension fund, and the survival period in 2020 is 258 days. By calculating 800,000/258 = 3,100 rubles , you will find out that if you retire in 2020, you will receive 3,100 rubles monthly.

How to find out the size of the funded part of the pension?

This is easy to do: you can come to the nearest branch of the Pension Fund or a local multifunctional center with your passport and ask for an extract. You can also use the Government Services portal and find out everything yourself in your personal account. The information is located in the section “Notice on the status of a personal account in the Pension Fund of Russia”

Why do they want to cancel funded pensions?

The Federation of Independent Trade Unions of Russia provides a number of arguments why a funded pension is not needed. The initiators believe that this part of the pension is calculated using a method that has become outdated; as a result, a person receives less money, while a completely different calculation is used for the insurance part of the pension.

In the State Duma, the idea was also supported by a number of deputies. For example, the head of the State Duma Committee on Labor and Social Policy, Yaroslav Nilov, believes that Russians do not trust private pension funds and their ability to preserve the funds invested by citizens in the long term.

Deputy Chairman of the Federation Council Committee on Social Policy Valery Ryazansky also said that Russians should choose for themselves where to save for retirement.

Why is the funded part of a pension important?

The funded part of the pension can be withdrawn in a lump sum. You are free to choose the fund to which the money will be allocated. In old age they will be a good help to the state part of the pension.

Will money be lost if funded pensions are cancelled?

If you are already receiving a pension, then no changes to the pension system will affect you. The rest of the citizens are still in question. But there's no need to worry just yet. As Finance Minister Anton Siluanov said, it will be possible to discuss the abolition of the funded part of pensions only when a voluntary savings system is introduced.

Photo: FederalPress/Polina Zinovieva

How and where to get your pension savings

The law provides for three types of payments: unlimited payments of the funded part of the pension, urgent payment at the request of the pensioner (but not less than 10 years) and a lump sum payment if the amount of savings is less than 5% of the established pension.

• One-time payment. Recipients: - citizens whose size of the funded part of the old-age labor pension, if assigned, is 5 percent or less in relation to the amount of the old-age labor pension.

• Urgent pension payment. Carried out when the right to establish an old-age labor pension arises, including an early one. The duration of such a pension payment is determined by the citizen himself, but it cannot be less than 10 years. Recipients: - participants in the State Pension Co-financing Program who paid additional insurance contributions for the funded part of the pension; — owners of a maternity capital certificate who used its funds to form the funded part of their future pension.

• Payment of the funded part of the old-age labor pension. Assigned subject to the conditions for assigning an old-age labor pension, including early retirement. The funded part of the pension will be assigned to citizens if they have the right to an old-age labor pension and their pension savings per month amount to more than 5% of the total labor pension. The funded part of the pension is always assigned with a lifetime condition of receiving it.

An application for a funded pension can be made at any time after acquiring the right to the specified pension without any time limit.

You should contact the insurer to whom the citizen entrusted his pension savings - the Pension Fund or Non-State Pension Fund.

Conditions for payment of the funded part of the pension in a lump sum in 2020

The total amount of monthly deductions from the employee’s salary (we are talking about officially employed citizens) is 22%, of which 6% goes, at his request, to form the funded part.

A citizen can refuse this accrual scheme and direct all 22% of transfers from his salary to an insurance pension.

In 2020, citizens who have reached retirement age have the right to receive the funded part of their pension based on the provisions of the Law of November 30, 2011 N 360-FZ Art. No. 2.

This article stipulates that a pensioner has the right to receive:

all accumulated funds in full at one time;
urgent pension payments every month;
funded pension;
at a time, all accumulated in the account of the deceased pensioner to the persons who are listed by him in the Will.

Citizens can legally receive pension savings before retirement only in the form of a lump sum payment and only if they are disabled people of groups 1, 2 or 3.

In the second case, a one-time payment of pension savings is provided in connection with the loss of a breadwinner (Article No. 4 Law of November 30, 2011 N 360-FZ).

The size of the lump sum payment depends on the actual state of the pensioner’s savings available in his personal account on the day from which he is assigned a lump sum payment.

Pensioners who continue to work after retirement age cannot receive a lump sum payment.

What is this - confiscation, “freezing” or self-liquidation?

The law signed by the President last December, which informs us all about the extension of the moratorium on the possibility of pension savings, has been extended, according to the most conservative estimates, until December 2020.

Yes, that’s exactly the strange name – “moratorium” – that was given to this process. But this is an official term prescribed in legislation. In another interpretation, from the lips of the same officials, a more ominous definition sounds - “freezing”. Of course, you can experiment with names ad infinitum, but this does not change the essence - the state permanently confiscates pension funds from the savings accounts of our citizens.

Let's first figure out what the idea was for introducing a funded pension system. Every month 22% of our earnings are transferred to the Russian pension fund. The introduction of the moratorium did not change anything in this regard - as before, this amount is regularly withdrawn, but how it is distributed further remains a mystery. Under the previous scheme, sixteen percent of your salary was withdrawn as an insurance pension contribution, and 6% went to the funded part of the future pension.

With the introduction of the moratorium, funds in citizens’ accounts were frozen, that is, this part of the system stopped working and money stopped flowing into their savings accounts. Then how can we understand the fact that the amount of pension contributions did not decrease in proportion to the frozen accumulation function, but remained the same?

In fact, if, with the introduction of a moratorium, the payer’s personal account has ceased to be replenished from the money that is transferred monthly by his employer to the pension fund, the amount of these transfers should decrease by the same six percent.

But this is precisely what is not happening, and for some reason we are not informed about where this money is going. At best, they patch holes in the budget. The question is, when all the holes are patched, will this money return to our personal savings accounts or will it be lost forever?

Of course, at first everything looked quite decent, people did not have any unnecessary questions, and the meaning of the very concept of “moratorium” did not particularly interest them. Entered it means it’s necessary. After the extension for another year, it would probably be worth the effort to explain to fellow citizens why all this is being done.

Now, without explanation, the funds in the savings accounts have been immediately frozen for a three-year period. Apparently, preparations are underway for the ceremonial funeral of the existing pension model, which has been built over the years. What form of pension provision for citizens will replace it?

Increase and indexation of pensions in 2018

When calculating February 2020 pensions, an indexation of four percent was made. And already in 2020, the government of the Russian Federation adopted a one-time payment of 5,000 rubles, instead of indexation. The difficult economic situation in the country resulted in a state budget deficit. This may be the reason for the lack of subsequent indexation of pensions, despite rising inflation. The possibility of increasing pension payments in the fall will be considered later. There are categories of persons for whom mandatory indexing is provided.

From now on, an increase in pension payments is provided only for non-working persons. The State Duma has received several projects for consideration that relate to the retirement age and the procedure for paying benefits to workers in hazardous industries. But they are all just waiting for their decision. Among them there are proposals regarding the funded part, the possibility of their transfer from the Pension Fund of the Russian Federation to non-profit organizations.

What has changed in the accrual of the funded share in 2018?

According to official data from the Pension Fund of the Russian Federation, there have been no significant changes this year, so the procedure remains the same. Changes took place only three years ago, when the process of formation and accumulation of this share was frozen. The same ruling has been in effect ever since, preventing the existing program from operating at full capacity.

The only key change for the current year is that working pensioners must decide whether to continue working or take advantage of the right to take legal leave and receive monthly benefits.

#Cumulative share #Cumulative pension #Cumulative pension 2018 #Cumulative part #Cumulative part of pension #Pension reform #Pension reform 2020 #Pension #Pension 2020 #Pension in Russia #Pension in Russia 2018

Read us first - add the site to your favorite sources.

Add a comment

{"commentics_url":"\/\/express-novosti.ru\/comments\/","page_id":381166,"enabled_country":false,"enabled_state":false,"state_id":0,"enabled_upload": false,"maximum_upload_amount":3,"maximum_upload_size":5,"maximum_upload_total":5,"securimage":true,"securimage_url":"\/\/express-novosti.ru\/comments\/3rdparty\/securimage\ /securimage_show.php?namespace=cmtx_381166″,”lang_error_file_num”:”\u041c\u0430\u043a\u0441\u0438\u043c\u0443\u043c %d \u0444\u0430\u0439\u043b\u043e\u 0432\u043c\u043e\ u0436\u0435\u0442 \u0431\u044b\u0442\u044c \u0437\u0430\u0433\u0440\u0443\u0436\u0435\u043d\u043e.","lang_error_file_size":"\u041f\u043e \u0436\u0430\u043b\ u0443\u0439\u0441\u0442\u0430, \u0437\u0430\u0433\u0440\u0443\u0437\u0438\u0442\u0435 \u0444\u0430\u0439\u043b \u0440\u0430\ u0437\u043c\u0435\u0440\u043e \u043c \u043d\u0435 \u0431\u043e\u043b\u0435\u0435 %d MB.","lang_error_file_total":"\u041e\u0431\u0449\u0438\u0439 \u0440\u0430\u0437\u043 c\u0435\u0440\ u0432\u0441\u0435\u0445 \u0444\u0430\u0439\u043b\u043e\u0432 \u0434\u043e\u043b\u0436\u0435\u043d \u0431\u044b\u0442\u044c \ u043d\u0435\u0431\u043e\u043b\ u0435\u0435 %d MB.","lang_error_file_type":"\u041c\u043e\u0436\u043d\u043e \u0437\u0430\u0433\u0440\u0443\u0436\u0430\u0442\u044c \u0442\u0 43e\u043b\u044c ""lang_text_loading":" u0437\u043a\u0430 ..","lang_placeholder_state":"\u0420\u0435\u0433\u0438\u043e\u043d","lang_text_country_first":"\u0421\u043d\u0430\u0447\u0430\u043b\u0430 \u0432\u044b\u04 31\u0435 \u0440\u0438\u0442\u0435 \u0441\u0442\u0440\u0430\u043d\u0443″,”lang_button_submit”:”\u0414\u043e\u0431\u0430\u0432\u0438\u0442\u04 4c","lang_button_preview":" \u041f\u0440\u0435\u0434\u0432\u0430\u0440\u0438\u0442\u0435\u043b\u044c\u043d\u044b\u0439 \u043f\u0440\u043e\u0441\u043c\u 043e\u0442\u0440″,”lang_button_remove ":"\u0423\u0434\u0430\u043b\u0438\u0442\u044c","lang_button_processing":"\u041f\u043e\u0434\u043e\u0436\u0434\u0438\u0442\u0435..."}

What does this term mean - funded pension?

In 2020, the previously unified benefit for pensioners was divided into insurance and funded pensions. Savings (hereinafter referred to as NP) differs from insurance in that it is accumulated and placed on the individual account of each citizen in the Pension Fund of the Russian Federation or NPF (non-state, private pension fund). In addition, the procedure for formation and payment is different, which will be discussed below. Both types of benefits are regulated by different laws; for NPs this is Federal Law-424 of December 28, 2013. However, to correctly understand the process of assigning this pension, it is also necessary to refer to other laws of the pension system, for example, Federal Law-360 of November 30, 2011. and to Federal Law-167 dated December 15. 2001.

In essence, a funded pension is compensation for income received during the period of working activity at the age when, according to a social agreement expressed in laws, a citizen is not able to provide for himself or work. In accordance with this, an NP is assigned to those who have acquired the right to also receive a regular insurance pension. In addition, it is necessary to have savings in the Pension Fund or Non-State Pension Fund.

Where to transfer the funded part of the pension?

All owners of accumulative pension parts who have decided to invest their funds profitably would like to know the nuances of choosing non-profit funds that can not only save, but also increase savings, and provide decent conditions during a non-working age. You don't have to worry too much about investing these funds. The work of all organizations specializing in preserving and increasing pension parts is strictly controlled by the Pension Fund and tax services. In case of bankruptcy of any of them, the seized assets are sent to the accounts of the Pension Fund.

However, the productivity of finance and capital growth depend on the correct choice of non-state pension funds. Therefore, you should carefully consider the choice of the fund into which the funded pension portions will be transferred. It is advisable to prepare, spend time studying reliability and profitability ratings, familiarize yourself with the composition of the founders and the area in which investments are made.

How is a funded pension calculated?

The formula for calculating a funded pension is: NP=PN/T

that is, the total amount of pension savings is divided by the expected period of payment of the funded pension.

In 2020, the expected period was 234 months.
In 2020 it is 240 months.
In 2020 it will be 246 months.

Thus, every year this period increases by 6 months.

However, this figure is still less than the real one, which is 261 months. This is exactly how long, according to the Ministry of Labor, Russians live after retirement.

Here's an example:

A citizen has pension savings in the amount of 240,000 rubles.

Upon retirement in 2020, the size of his funded pension will be 240,000/240=1000 rubles. per month.

Upon retirement in 2020, the amount of his funded pension will be 240,000/246 = 975.61 rubles. per month.

Accordingly, when this citizen retires in 2019, the size of his funded pension will be even smaller, since the expected payment period will be increased again.

The Central Bank noted that sometimes NPFs illegally refuse citizens a one-time payment of pension savings due to the fact that they use an incorrect indicator of the expected period of pension payment.

Meanwhile, NPFs do not have the right to independently set this indicator and must apply the value established by the Government of the Russian Federation.

In addition, it should be taken into account that if an insured person applies to a non-state pension fund later than the year in which the right to a funded pension arose, the expected period is determined as of the year the insured person applied to the fund, and not as of the year in which such a right arose.