Individual pension capital – what is it, how will the IPC work?

Structure of estimated pension capital

The insurance pension is determined for each person individually. To qualify, you must reach the age limit and have:

• minimum number of pension points (PB);
• required insurance experience.

When you retire, you must submit an application through your employer or directly to the Pension Fund for the assignment of allowances. The PFR benefit consists of two main parts:

• Fixed (basic) value. The size is determined by a decree of the Government of the Russian Federation and is subject to annual indexing.
• Insurance part. The amount is determined by multiplying the number of PB earned during work activities by the cost of one point on the date the pension is calculated.

PB began to be calculated only after the 2020 reform. The number of points for the period before 2020 can be determined by knowing the estimated pension capital.

It is formed from the total amount of insurance premiums and other transfers to finance the insurance part of the pension.

Payments are received for the insured person to the PFR budget based on personalized (individual) accounting data. RPK consists of:

• pension rights converted in monetary terms acquired by insured citizens before 01/01/2002;
• the amount of valorization and insurance contributions transferred by the employer to the Pension Fund after this date.

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The influence of the PKK on the size of the pension

Pension reform of the XXI century. introduced a new pension calculation method. The size of its insurance part began to be determined by the estimated pension capital, consisting of the initial capital earned before the 2002 reform (PC1) and the amount of insurance payments (PC2) made after this year until the end of employment.

The fixed part of the pension - its basic component - is the minimum that a person who has worked for a total of at least 5 years can count on. The basic part was established by the state and did not depend on the size of the employee’s salary and length of service: it is the same for everyone.

The insurance part of the pension - the amount of deductions from wages made for the entire working period - formed the estimated pension capital, which determined what pension the employee deserved. The higher his salary and the longer the length of service, the greater the amount of savings in his personal account with the Pension Fund of Russia (PK2), and therefore the size of the pension. Its actual size is equal to: RPK/T, where T is the number of months of the average life of pensioners, determined by statistics.

Accounting for insurance contributions to the Pension Fund began in 2002. Everything that the citizen had earned before—pension rights from the pre-reform period—was expressed using calculation methods in the form of a monetary amount as initial capital (PC1) and was also entered into the employee’s personal account. Thus, RPK = PC1 + PC2 – for persons with mixed pre-reform and post-reform experience.

The procedure for converting pension rights until 2002

To calculate the old-age pension until 2002, the employee's length of service and salary were used. According to the Law “On Labor Pensions in the Russian Federation” dated December 17, 2001 No. 173-FZ from 2002 to 2020. Pension rights were determined in accordance with Soviet legislation, indexed, and then transferred to the personal account of the Pension Fund of the Russian Federation in the form of initial capital.

You can calculate the RPC yourself using the following method:

1. The length of service coefficient is determined.
2. The average monthly earnings coefficient (AMC) is calculated.
3. The estimated pension is calculated as of January 2002.
4. Valorization is being carried out.
5. A correction factor is applied.

How to determine your estimated pension

At the initial stage, you need to determine the experience coefficient. It depends on the gender of the applicant and the duration of employment. Please note that regardless of the calculation results, the maximum value applied is 0.75:

• If a man’s length of service is less than 25 years, and a woman’s is 20 years, the SC value is set to 0.55.
• For each additional year of experience over 25 years for men and 20 for women, 0.01 is added to the SC value of 0.55.

At the next stage, the calculation of the KSZ is carried out. To do this, the average salary for 2001-2002 is calculated. or for another 60 months. The result obtained must be divided by the average monthly salary in Russia for the same time period. Average monthly earnings in Russia from 2001 to 2002. was 1,494.5 rubles.

Regardless of the final result, the marginal KSZ is:

• 1.4-1.9 – for those working at that time in the Far North;
• 1.2 – for all other applicants.

Having all the data, the amount of the estimated pension is determined:

• If the experience coefficient is 0.55:

RP of men = (SC x KSZ x 1,671 - 450) x (annualized experience accumulated before 2002/25)

RP of women = (SC x KSZ x 1,671 - 450) x (annualized experience accumulated before 2002/20)

• 1671 is a constant and corresponds to the average salary in the country in December 2001.
• 450 is the basic pension amount established by Law No. 173-FZ.

Please note that according to Law No. 173-FZ, if RP = SK x KSZ x 1,671 is less than 660, the estimated pension is determined by the formulas:

RP men = 210 x (annualized experience accumulated before 2002/25)

RP of women = 210 x (annualized experience accumulated before 2002/20)

• If SC is greater than 0.55:

RP = SK x KSZ x 1,671 – 450

Please note that according to Law No. 173-FZ, if RP = SK x KSZ x 1,671 is less than 660, the calculated pension is set at 210.

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Valorization

Valorization is applied to the calculated pension amount - a one-time increase:

• If the pensioner does not have work experience before 1990, 10% is added to the result obtained.
• If there is employment for this period, 10% is added plus 1% for each full year of experience. You can confirm your work experience with a work book, statements, orders, contracts.

Determination of the settlement capital of RPK 1

The amount of the insurance pension (SP) as of January 1, 2002 will be:

SP = RP + SV, where:

• SP – insurance pension;
• RP – estimated pension;
• SV – amount of valorization.

Please note that if the obtained result of the joint venture is multiplied by 228 (the number of months of the survival period, which is 19 years), then the result will be the amount of capital that the citizen formed as of January 1, 2002.

Since capital indexation was carried out annually, in order to obtain the ruble expression of the RPC, it is necessary to apply an adjustment factor to the amount of the insurance pension. They will be the product of the annual indexation coefficients for the period from 2002 to 2014. inclusive. It is equal to 5.6148:

RPK1 = SP x 5.6148, where:

• RPK1 – estimated pension capital accumulated as of January 1, 2002;
• SP – the amount of the insurance pension;
• 5.6148 – indexing coefficient.

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The applicant can receive money:

1. to a bank account or cash desk at a bank.
2. in an organization that delivers funds;
3. at the post office;

Transfer of funds is carried out within 2 months after receipt of the relevant application.

Therefore, in the formula by which it is determined, the BC is subtracted from the estimated pension (RP). In this formula, T denotes the expected period of payment of the old-age pension.

Note! After providing the money, the pensioner has the right to apply for a new lump sum payment after 5 years. Can non-pensioners take advantage of this opportunity Although the law allows people who have already reached retirement age to use accumulated funds, there are some cases when non-pensioners can receive money:

• Legal successors. When the investor dies, his heirs have the right to withdraw funds. But this is possible if the legal successor has a power of attorney.

Unfortunately, they cannot receive a lump sum benefit.

7.1. The amount of estimated pension capital (PC)

Pension capital is accounted for in the individual personal account of each insured person, opened with the territorial body of the fund.

Information about the status of a personal pension account in the personalized accounting system is the main data for assigning a labor pension. To citizens who worked for more or less a long time according to the norms of the old pension legislation, the state has an obligation to convert pension rights earned under the old model into rights taken into account in the new model, and to constantly carry out indexation until the citizen retires. To current pensioners, the state has obligations increase the pension amount to the level of the pensioner’s subsistence level and constantly index pension payments. The value of pension capital (PC) since 2010 consists of: PC = PC1 + PC2 + SV, where PC1 is the initial pension capital - these are pension rights in monetary terms, purchased by citizens before January 1, 2002

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Calculation of pension savings from 2002 to 2014

Starting from 2002, pension savings are calculated according to a different scheme:

1. Obtaining information on insurance premiums generated for the period from 2002 to 2014.
2. Indexation of estimated pension capital.
3. Calculation of the amount of pension capital.
4. Conversion into points.

Employer insurance contributions from 2002 to 2014

Information about the length of insurance, the amount of contributions and the number of pension points is contained in the individual personal account with the Pension Fund. You can get the data:

• during a personal visit to the Pension Fund with a passport;
• through your personal account or State Services using your SNILS number, phone number or email address.

Please note that the amounts of the listed insurance premiums are given without indexation, so they must be multiplied by the coefficient corresponding to the year (approved by the Government of the Russian Federation):

Determination of the amount of pension capital of RPK 2 as of 01/01/2015

The amount of RIC 2 is the amount of insurance premiums for each year, multiplied by the required indexation coefficient:

RPK 2 = SV2002 × 1.307 + SV2003 × 1.177 + SV2004 × 1.114 + SV2005 × 1.127 + SV2006 × 1.16 + SV2007 × 1.204 + SV2008 × 1.269 + SV2009 × 1.1427 + SV2010 × 1.088 + SV2011 × 1.1065 + SV2012 × 1.101 + SV2013 × 1.083 + SV2014, where

• SV2002-SV2014 – insurance premiums for the corresponding year.

Main principles of IPC operation

The introduction of such a concept from the Ministry of Finance involves the introduction of new principles that will ensure the functioning of the IPC. And further about this in detail.

Essence and principles:

1. It is possible to take advantage of such a function as holidays, when mandatory savings contributions will be stopped at the request of the payer himself;
2. Participation in the system is constant even if a person chooses a vacation period. By the way, the period of such a grace period can be up to 5 years. Moreover, the number of times such a benefit can be applied for is not limited;
3. Tax benefit for personal income tax in the amount of up to 6%;
4. Possibility of early use of accumulated individual capital.

And the last function radically distinguishes the state of affairs that has developed in the country now and the one that will happen. Now not a single elderly person, for any reason, can take advantage of their savings, but in the future such an opportunity will appear.

Options when early withdrawal of accumulated capital is possible:

• In case of a serious illness, which is confirmed by relevant medical certificates, money can be withdrawn from the Pension Fund at any time in full, but spent only on treatment;
• 5 years before the expiration of the period when a person must retire, a person may ask to withdraw about 20% of his savings to solve difficulties that have arisen.

At the same time, the function itself does not imply that the money should be returned to the account by the citizen after solving problems or recovery. Resources are issued irrevocably. And this is a huge advantage.

The main prospects for introducing a savings account with capital formation:

1. There is always a guarantee system;
2. Ensuring a dignified old age;
3. The opportunity to save for your old age, without incurring large expenses, due to tax incentives and discounts;
4. The ability to always rely on the means at hand in emergency situations.

As for when this innovation will start working, the Government is talking about 2020, when the new tax system will be introduced. For now, everything will work as before.

Initially, they planned to launch in 2020, but after assessing the real capabilities of the state, analysts and reformers realized that it was necessary to radically change tax incentives and legislation, and this was not possible by 2020. Therefore, only in two years.

Another interesting point is that it is tentatively planned that these 6% are simply additional measures, monetary incentives that will go to the IPC.

But this is not something that will completely form the collateral. Each person in non-state pension funds will be able to accumulate their funds in a separate account, annually adding to it the amount of interest received. The account will act as a deposit account.

Payments will be made through a bank, for example, a state bank or through all financial institutions (not yet known). In addition, this financial institution may be included in the list of those in whose accounts money can be stored. But for now these are all assumptions and developments.

See what documents are needed to obtain SNILS. What does the value of a pension point mean? Find it at the link.