Do you need to insure your pension savings? Pros and cons

What is a Guaranteed Pension Plan?

Guaranteed Pension Plan (GPP) is a new pension scheme.
It consists in the fact that future pensioners themselves voluntarily make contributions for their pension. These contributions go into a special fund, and the future pensioner himself goes into the register. The fund and the register are monitored by the state. Contributions are accumulated in the fund, and when the time comes, an increase in the pension begins to be paid at their expense. Participants in the new scheme pay money for their future pension voluntarily. And employers can do this for them. Moreover, the amount of income from which contributions can be calculated is not limited.

Within the framework of a guaranteed pension plan, the state will supposedly save money precisely and make sure that it does not freeze and reaches pensioners who have been saving for their old age. But this is according to the documents. Come and discuss in the comments what difficulties there may be in practice and whether it is worth believing the next promises of the state. This analysis contains only theory, that is, what is proposed to be changed in the laws for pension savings of a new level.

What is the purpose of the guarantee system?

The guarantee system is designed to protect the legitimate interests and rights of citizens insured in the compulsory insurance system. This establishes the responsibility of all non-state pension funds for the safety of citizens’ savings. For these purposes, the Deposit Insurance Agency has opened a pension savings guarantee fund, which receives funds every year from all participants in the mandatory pension insurance market included in the register. These funds are aimed at use in the event of warranty cases, namely:

• cancellation of the NPF license;
• insufficient funds from the NPF at the time when the insured person needs to establish a payment from pension savings;
• reduction in the size of the Pension Fund's reserve funds for compulsory pension funds.

All warranty cases are provided for by the Federal Law “On Guaranteeing the Rights of Insured Persons in the Compulsory Pension Insurance System” dated December 28, 2013 No. 422-FZ. In any guarantee case, the lack of funds in savings will be compensated by the Deposit Insurance Agency. In addition, the guarantee system provides for the creation of reserve funds under compulsory pension insurance by the participant fund in order to fill the deficit in pension savings.

Deposit Insurance Agency (DIA)

In order to implement the main tasks of the entire system of guaranteeing pension savings of insured persons, the Deposit Insurance Agency was created within the framework of Law No. 422-FZ.

The main tasks of this structure as the administrator of the entire system are:

• collection of guarantee fees for the formation of a fund of the same name, control over their receipt;
• payment of warranty compensation in the manner prescribed by law;
• investing the fund's funds in order to obtain additional income;
• responsibility for participants in the system and performing functions for the liquidation of a particular fund in cases specified by law in accordance with clause 4, art. 10 Federal Law No. 422 dated December 28, 2013

In essence, the DIA protects the funded pension of citizens and guarantees the payment of all funds accounted for in the special part of their personal account, with the exception of the additional income they have accumulated. Payments already assigned from pension savings are also guaranteed, and their size cannot subsequently be reduced.

It is worth noting that the system for preserving pension savings is two-level , namely it includes:

• funds that make up the reserve for compulsory pension insurance and are formed by each NPF;
• a fund for guaranteeing citizens' contributions, managed by the Deposit Insurance Agency.

The DIA keeps records of all non-state pension funds included in the register of participants forming this fund. The conditions for NPFs to enter the guarantee system are:

• whether he has a license;
• passing the corporatization procedure;
• positive decision of the Central Bank after conducting an appropriate audit of the fund’s activities;
• payment of mandatory contributions.

Those non-state funds that are not included in the register are required to stop concluding contracts on compulsory pension insurance and transfer their savings to the Pension Fund.

How is the pension formed?

A funded pension can be formed voluntarily by choosing a specific method of pension provision. In this case, 6% of the basic rate of 22% will be used to accumulate additional funds for pension. Therefore, an individual’s individual account contains savings in the form of:

• pension savings created by a person independently in one of the proposed non-state pension funds,
• the amount of payment ensuring guaranteed receipt of the funded share of the pension.

Pension savings are discussed in more detail in Federal Law 360, which regulates the procedure for transferring pension savings.

Kazakhstan has a unique system of state guarantees for the safety of pensions

The Unified Accumulative Pension Fund actively continues to inform the population, explaining to investors the current state of a whole range of issues related to the pension system, Zakon.kz reports.

Thus, in all branches of the Unified Accumulative Pension Fund an Open Day “State Guarantee of the Safety of Pension Savings” was held. The UAPF holds Open Days on an ongoing basis, and this is understandable, because on this day everyone can not only receive a standard package of services from the fund, but also learn a lot of new things about both the pension system and the work of the fund as a whole.

This time the topic of the state guarantee of the safety of pension savings was chosen, which never loses its relevance and significance for investors. During the Open Day, participants were presented with a large amount of information material about the safety and income of pension savings in Kazakhstan.

Pension savings in an individual pension account are constantly invested and generate income, which is credited to both the accounts of contributors and recipients on a daily basis. Investment income is not a strictly defined value, but depends on the market value of securities purchased on the financial market and on the volatility of foreign exchange rates. This difference will be paid to recipients when they become eligible for pension payments. Fund employees explained in detail who has the right to apply for payment under the state guarantee and where to apply for payment.

Today, Kazakhstan has a unique system of state guarantees for the safety of pension savings. The state guarantees the safety of mandatory pension contributions actually made to the UAPF, taking into account the inflation rate at the time of retirement. In accordance with Article 5 of the Law “On Pension Provision in the Republic of Kazakhstan”, the state guarantees recipients the safety of mandatory pension contributions and mandatory professional contributions to the UAPF in the amount actually paid, taking into account the inflation rate at the time of receipt of the right to pension payments. That is, when a person retires, the profitability on his individual pension account is calculated in relation to the inflation rate for the entire period of being in the funded pension system. If the return on pension savings is below the inflation rate, the state compensates for this difference. This suggests that depositors’ savings are reliably protected regardless of how events develop in the financial markets and how the situation with investment income develops.

Sources of pension accumulation

It is worth talking separately about the sources from which pension savings can be formed:

• insurance for the cumulative share of payment (when the person is insured) refers to:

1. people born after 1967,
2. women 1957-66 and men 1953-1966 births that created a funded part in 2002-2004, and then stopped doing so due to new amendments to the laws.

• additional insurance contributions, including money that is transferred as co-financing of a pension. Not only an individual, but also an employer or the state has the right to do this.
• Maternity capital (part or all of it).
• Profit from investments of money that has already been transferred.

It is interesting that funds accumulated as a pension, after the death of an individual, according to some laws of our country, must necessarily pass to his heirs.

What are pension savings called and how are they formed?

After the law “On Insurance Pensions” was adopted in our country in 2020, funded payments acquired the status of self-support.

Note! The creation of this benefit is carried out exclusively on a voluntary basis.

The insured person's savings are funds, which include:

1. savings money that is formed by people both in the Pension Fund and the selected private management company;
2. funds of payment reserves, which make it possible to ensure the payment of funded benefits.

The formation of pension savings is carried out from the following sources:

1. thanks to insurance contributions of insured people for funded benefits;
2. thanks to additional contributions, including money transferred under the benefit co-financing program not only by ordinary citizens, but also by employers and the state;
3. thanks to funds from maternity capital (finances can be transferred either in full or in part);
4. thanks to income received in connection with the investment of transferred funds.

Need to know! After the death of the owner of the savings, all his savings pass from the property to the legal successors.

Guarantee system levels

The pension savings guarantee system consists of 2 levels:

1. Internal reserve funds formed by non-state pension funds, which are aimed at ensuring guarantees for payments of the funded part of the pension;
2. A nationwide pension savings guarantee fund managed by the DIA (Deposit Insurance Agency).

The first level guarantee system, namely the creation of an internal reserve fund, works according to the following scheme. Funds received by a non-state pension fund, a state or private management company, are invested in various projects regulated by the state in order to make a profit.

After investment activities, these companies calculate profits, 15% of which goes to pay remunerations for management activities, and the remaining part goes to the formation of savings and an internal reserve fund. At the same time, funds from the reserve fund can also be used for investment activities.

The maximum amount of funds entering the reserve fund is 10% of the income received. And if there is no income, 1% of the amount of savings goes to the reserve fund. This means that even if management companies or non-state pension funds have not received income, which is quite likely in the current economic situation of the state, they are obliged to contribute funds to the reserve fund, but only from pension savings.

Second level guarantee system

The second-level guarantee system involves the creation of a national guarantee fund under the management of the DIA. The activities of the deposit insurance agency are directly related to the insurance of pension savings. The Agency forms a fund for guaranteeing pension savings by collecting guarantee contributions, and at the same time controls the completeness and timeliness of receipt of contributions to the fund. These contributions are made from the own assets of NPFs or participating funds in the compulsory pension system.

An example explains how pension savings are guaranteed by the DIA. If a non-state pension fund, which a citizen has chosen as an insurer of pension savings, declares bankruptcy or loses its license, payments on current obligations will not stop or be delayed. The pensioner will not even feel these changes; he will continue to receive his funds in the same way, only they will be accrued from the Deposit Insurance Agency. In this case, the amount of assigned pensions is guaranteed in full and is not subject to reduction.

Opinion "For"

Vladimir Nazarov, head of the laboratory of fiscal federalism at the Yegor Gaidar Institute of Economic Policy:

“This system is absolutely necessary, because the guarantee system that exists now is, in fact, not financially supported by anything - there are no financial resources that would guarantee the safety of pension savings, and all this burden, if anything happens, falls on the budget .

If we insure all citizens of the Russian Federation, then the question is, how will we do this? The answer is very simple - at the expense of citizens of the Russian Federation. At this point a paradox arises, at this point this idea becomes meaningless.”

— Pavel Medvedev

In addition, the volume of guarantees is now absolutely insufficient, because currently only the nominal value is guaranteed, whereas in the bank deposit guarantee system, if you have a deposit of up to 700 thousand, you are guaranteed not only the nominal value, but also the interest. In the case of pension savings, most likely, it would be more logical to guarantee the entire amount of pension savings and a return not lower than inflation, but for a long-term period, that is, at the time a person retires, his savings should consist of the sum of all contributions multiplied by accumulated inflation .

A guarantee should look something like this; accordingly, it should be applied either if a person has retired and savings are not enough to cover inflation, in which case guarantee instruments should come to the rescue, or in the event of bankruptcy of a non-state pension fund, the value must be immediately restored savings.

The guarantee system that exists now, in fact, is not financially supported by anything - there are no financial resources that would guarantee the safety of pension savings, and all this burden, if anything happens, falls on the budget.

— Vladimir Nazarov

This fork in the road is such that it needs to be discussed, however, such a guarantee fund must be created. Direct part of the guarantee contributions, a certain share, to it and form a sufficient fund in order to protect against both the bankruptcy of the NPF and low profitability for the entire period.”

How to become a GPP participant

To participate in the new pension savings system, you need to enter into an agreement with a non-state pension fund. Attention: not with the Pension Fund of Russia, but with those structures that are now collecting money for pension savings. Now, even without the new law, anyone can enter into an agreement and make contributions to a future pension in addition to the regular state one. Such funds must be joint stock companies.

It is important that each participant is included in the register. People are included in the register based on an application sent to the pension operator through government services. An employer can also add a person to the register if the employee requests it. In response, you will receive a notification: “You are in the registry.”

Transfer to management company and non-state pension fund

As was said, “their” management companies work with the Pension Fund under an agreement, and non-state pension funds are engaged in mandatory pension insurance in terms of the formation of pension savings.

It is important that the Pension Fund not only distributes new funds entering the savings system, but also redistributes pension savings already in it. The latter also happens in accordance with a person’s choice.

At the person’s choice, the transfer of pension savings to a non-state pension fund or management company occurs on the basis of an application. In 2020, the Pension Fund accepted about 6.3 million applications for consideration.

There are 2 main reasons for refusals of applications according to practice:

• duplication of applications (i.e. filing several, while by law only one can be accepted for consideration at a later date);
• absence of an agreement between the insured and the NPF (this is a mandatory condition in the case of transfer of pension savings);
• errors (incorrect type of application; transfer of savings to a fund in which they are already located; violation of the procedure for submitting an application).

How to conclude a GPP agreement

It is proposed to conclude the agreement by joining the pension rules - this is a simplified scheme. This is approximately how contracts are concluded with telecom operators or insurance companies. That is, the parties do not discuss the terms of the agreement: there are rules, if you’re happy with it, join on an equal basis with everyone else and on the same terms.

In the case of a pension scheme, payment of the first contribution will be considered as joining. If desired, the contract can be terminated upon application. All functions for joining, changing the fund and terminating the contract are promised to be done through government services.

How to pay contributions under the new scheme

Each participant in the pension plan decides for himself how many contributions he will pay. This can be a fixed amount - for example, 1000 rubles per month. Or a percentage of income: for example, the employer will contribute 5% of the salary to the fund.

The amount of contributions is reflected in the register. The amount can be changed. When the time comes to receive pension payments, payment of contributions stops.

Participants can suspend transfers - that is, set a rate of 0%. There may be several such periods, but each is no longer than five years.

You can also terminate the contract and withdraw the contributions - but no later than six months after the first payment. The fund will return the entire amount within three working days. The law says that the entire amount of contributions is returned, but there is nothing about the income that these contributions brought. If six months have passed, you won’t be able to simply withdraw your contributions. We'll have to wait for retirement.

How to choose and change a fund for paying contributions

They offer to choose a fund when registering in the register of participants. Probably, some kind of separate service will appear, or the choice will only be available for government services. Upon registration, you will be offered a choice from a list of funds with the right to collect pension savings within the GPP. There will also be an opportunity to change the fund. This can be done at any time six months after the first contribution is paid and before pension payments are assigned.

The pension can be paid by another fund, not the one to which the money was deposited. That is, reserves were formed in one place, and they came to another for an increase in pensions. If there is no separate application for choosing a fund for payments, the one that received the contributions will pay.

If a GPP participant wants to change the fund to which he pays contributions, all accumulated funds are transferred to the new fund. The same situation will happen if something is wrong with the fund - for example, it was liquidated. The money is promised to be transferred taking into account the result of the investment - that is, the income from the placement of savings.

Will state guarantees be paid to pensioners?

From October 11, 2020, upon retirement, all services for determining payments in Kazakhstan are provided comprehensively, in the so-called composite-proactive format, reports with reference to Elorda.info.

To complete the documents, you need to contact the Public Service Center, fill out an application and attach a package of documents. Based on this, the recipient’s right to assign three pension payments at once is considered: a joint (labor) pension, a basic pension and pension payments from the Unified Pension Fund.

The application procedure has become simpler; if previously it was necessary to submit three applications, now one is enough for three types of payments with one package of documents. In addition, pension payments arrived in the bank account at different times, making it difficult for the pensioner to determine which payment it was.

Upon reaching retirement age, the profitability on the recipient’s pension account is compared with the inflation rate for the entire period of being in the funded pension system. If it is below the inflation rate, the state compensates for this difference. This is called a state guarantee. That is, the state guarantees that the savings of investors in the unified pension savings fund will be reliably protected regardless of the situation in the financial markets and investment income.

As you know, the employee makes monthly mandatory pension contributions (CPC) to the UAPF, and the employer makes mandatory professional pension contributions (CPC).

If the total amount of pension savings, taking into account investment income, is greater than or equal to the amount of actually contributed OPV and OPV taking into account the inflation rate, then the state guarantee is not paid.

The purpose of the state guarantee is considered automatically, without a citizen’s application.

Pension payments to retiring citizens are transferred to one bank account at a time. The payment of the state guarantee is also calculated once (if such right exists).

Payments are made on the basis of Decree of the Government of the Republic of Kazakhstan No. 624 dated October 9, 2020 “On introducing amendments and additions to certain decisions of the Government of the Republic of Kazakhstan”, which came into force on October 11, 2020.

To date, 2,084 people have taken advantage of this opportunity. A one-time payment of the state guarantee is made at the expense of the republican budget.

Payment of the state guarantee applies to persons:

— those who have reached retirement age (men – 63 years, women – 58.5 years);

— who have been diagnosed with disability of the first or second group for an indefinite period;

- those who have reached retirement age (58.5/63), and have entered into a pension annuity agreement and have pension savings in the Unified Accumulative Pension Fund, for the period from the moment of concluding a pension annuity agreement with an insurance organization until reaching retirement age;

- foreigners and stateless persons who have left for permanent residence outside the Republic of Kazakhstan, who have submitted documents determined by the legislation of the Republic of Kazakhstan, confirming the fact of departure.

For the convenience of citizens, pensioners will be able to check through the Electronic Government portal egov.kz whether they need to apply for payment of a state guarantee to public service centers. The service will be launched on November 1, 2018.

If a citizen has previously applied for payment under a state guarantee or does not have the right to this payment, information about this is also provided through this electronic service.

How does the state guarantee the safety of savings?

Non-state funds that accept contributions will form guarantee reserves. That is, they collect money from GPP participants, and then transfer part of the contributions to a common pot - the pension savings guarantee fund. This is roughly how the bank deposit insurance system works. If something happens to one fund, money will be taken from the reserve to pay its clients. The same Deposit Insurance Agency, which pays compensation to bank depositors, will take part here.

If the fund works negatively - that is, it placed savings, but did not earn anything and even lost - it is obliged to compensate for these losses at its own expense. That is, GPP participants do not seem to risk anything: they will definitely receive the entire amount of contributions back.

Pension savings will be insured like bank deposits

The government has developed a scheme to protect the population's pension savings. The Ministry of Economic Development came up with the idea of ​​​​creating a pension fund, an analogue of bank deposit insurance. However, this may be unprofitable for non-state pension funds

Photo: RIA Novosti

The Russian government has figured out how to ensure the safety of pension savings for the population. According to the Vedomosti newspaper, the Ministry of Economic Development has prepared a bill on the creation of a special pension guarantee fund - an analogue of bank deposit insurance.

The new fund will be filled from contributions from state and private pension funds. The Ministry of Economy proposes to use money from the Russian National Welfare Fund for this, the Ministry of Finance is against it. Not all non-state pension funds will meet the contributions, says council member Yuri Smyshlyaev: “The fund is needed. This is an interesting solution and protects the rights of citizens, not always from unambiguous actions on the part of non-state pension funds. By analogy with the DIA, the idea is good, but, as always happens, the devil is in the details and the question is how the creation of such a guarantee fund will be structured. Today there is a certain procedure according to which non-state pension funds earn and those figures that indicated a one-time contribution of 0.5 assets as an initial contribution, a fairly large amount. How it will be discounted for non-state pension funds for some other expenses is not very clear.”

The idea of ​​the Ministry of Economic Development is good, but it is not possible to insure against all cases, says former head of the management Pavel Teplukhin: “Those people who wanted to create this kind of insurance mechanism, they had in mind protection against a fall in the stock market. In reality, there is no way to protect yourself from a stock market decline. The cost of protecting against this type of fall will be much higher than the fall itself. You can protect yourself from the dishonest behavior of some individuals in this system: agents, officials, individuals who may make some mistakes. The pension system has existed for 10 years, the funded part. And there have never been any costs or losses that were associated with dishonest behavior. The losses are because the market has fallen.”

So far there is no consensus in the government about what is considered an insured event and when to pay out money. The Ministry of Economic Development proposes to insure the amount of savings, the Ministry of Finance - non-payment of pensions.

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Deposit insurance institution

In accordance with federal legislation (422FZ), our country has a Deposit Insurance Agency (DIA). It is necessary to fully guarantee pension payments. Its tasks include:

1. transfer of money as a guarantee of compensation under the law,
2. collection of contributions that make up the guarantee fund, as well as control of the regularity of their receipt,
3. investing money in the fund to make a profit,
4. bearing responsibility for the members of the system,
5. performing actions to complete the activities of funds in cases established by the legislation of our country (FZ-422).

In fact, the DIA is intended to protect the funded pension of individuals and become a guarantor of the safety of all money located in a separate part of their account. But this does not include the additional income they accumulated. The guarantee is provided by designated transfers from pension savings. Moreover, their value cannot decrease over time.

It should be noted that the pension security system can be called consisting of two stages, namely including:

• money that is a pension insurance reserve, formed in each non-state pension fund,
• guarantee fund, controlled by the DIA.

The responsibilities of the DIA include keeping records of each member making up the list of NPFs . To join the guarantee system, a non-state PF must meet the following requirements:

1. have a license;
2. go through the process of incorporation;
3. must pay dues;
4. have a satisfactory decision from the country's Central Bank after the fund has been checked accordingly.

If a non-state fund is not listed in the register and was unable to get there, it should no longer enter into compulsory pension insurance agreements. He is also required to transfer all previously accumulated funds to the Pension Fund.

Rules for receiving payments under the state guarantee in the UAPF

The UAPF warns all recipients not to trust information from unofficial sources, inAlmaty.kz reports with reference to the official website of Astana.

The law provides for liability for sending knowingly false information.

Kazakhstan has a unique model of state guarantees for the safety of pension savings.

“In accordance with Article 5 of the Law of the Republic of Kazakhstan “On pension provision in the Republic of Kazakhstan”, the state guarantees recipients the safety of mandatory pension contributions (CPC) and mandatory professional pension contributions (CPPV) to the UAPF in the amount of the amounts actually contributed, taking into account the inflation rate at the time of receipt rights to pension payments,” reports the Unified National Fund.

Please note that payment of the difference is a one-time payment from the state budget.

“Depositors receive the right to payment under a state guarantee upon reaching retirement age. In addition, disabled people of groups 1 and 2 have this right, if the disability is established indefinitely, persons who have left for permanent residence outside of Kazakhstan, foreigners and stateless persons who transferred OPV, OPPV, heirs in the event of the death of a person entitled to payment under state guarantees. The amount of compensation is calculated individually. When a person retires, the profitability on his individual pension account is calculated in relation to the inflation rate for the entire period of being in the funded pension system,” comments the UAPF.

If the return on the investor’s pension savings during his stay in the system is below the inflation rate, the state compensates for this difference. However, if the amount of pension savings formed through mandatory types of contributions and accrued investment income is greater than or equal to the amount of contributions made taking into account the inflation rate, the difference is not paid.

Let us remind you that in October of this year, a composite service was introduced for submitting a single application for the assignment of old-age pension payments.

“Now, according to the “one window” principle, persons who have reached retirement age, in order to assign old-age pension payments and the state basic pension payment, as well as to receive pension payments through mandatory types of pension contributions (OPV, OPPV) from the UAPF, must submit a single application and a package of documents only to the Public Service Center (PSC) of the State Corporation “Government for Citizens”. Based on the specified application, the recipient will be provided, among other things, with a proactive service for the payment of the state guarantee. For each recipient, a calculation will be made using a specially developed method, and the person will receive a payment to his bank account, if he is really entitled to it,” the fund said.

The Fund warns all depositors and recipients of the need to be critical of all kinds of messages disseminated on social networks and to trust exclusively verified information from official sources.

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Non-state pension funds included in the guarantee system

Organizations wishing to obtain a NPF license had to submit an application to the Bank of Russia before December 31, 2020. In the summer of 2020, the Central District Bank completed the consideration of NPF applications regarding their compliance with the requirements for participation in the guarantee system. The assessment of organizations wishing to enter the register of non-state pension funds was carried out according to specific indicators:

• availability of sufficient equity capital;
• investment activities;
• good business reputation;
• internal control system and risk management.

As a result of the review, the system included 46 non-state pension funds, in which 29.01 million insured persons were registered, through which 1,989.73 billion rubles of savings were generated. Before this, 93 non-state pension funds operated in the OPS system. Organizations whose license was revoked or whose activities were banned under the OPS were required to transfer all savings to the Pension Fund. The PFR automatically became the insurer of citizens insured in these companies, and the savings funds were transferred to the investment portfolio of VneshEconomBank, which is the state management company of the PFR.

If the pension savings transferred from non-state pension funds that are not included in the guarantee system are insufficient to the Pension Fund, the Bank of Russia will reimburse the Pension Fund for the missing money up to the guaranteed amount (taking into account the nominal value of insurance contributions).

According to Federal Law No. 422, the insurer under the compulsory insurance policy can be the Pension Fund of the Russian Federation or a non-state pension fund that is part of the guarantee system in the compulsory insurance policy. The Pension Fund invests pension savings through Vnesheconombank, which is a state management company, as well as through private management companies.

According to Article 22 of Federal Law No. 422, the ban on activities in the insurance system is valid until the license of a non-state pension fund is revoked or until a conclusion is made on the compliance of the specified non-state pension fund in accordance with the requirements of Article 19 of the same law.

NPF in the pension savings guarantee system

The role of NPFs in guaranteeing the protection of citizens’ pension savings is as follows:

1. Acceptance of citizens' funds for cumulative storage with their subsequent release for use after the time established by law.
2. Concluding an official agreement with a citizen to guarantee the storage period of funds in the savings sector of the non-state pension fund.
3. The Pension Accumulation Fund is fully guaranteed by its own statutory funds to ensure the safety of the funds of the citizen who made payments towards savings for retirement.
4. Payments of guaranteed protected funds from the recipient's accounts in the NPF are carried out strictly within the time limits established by law.
5. The system for guaranteeing the safety of pension savings allows you to accumulate funds in the accounts of citizens in the amounts established by them within the framework of the concluded agreement with the NPF.
6. Schedules for payment of funds to recipients are established directly upon concluding an agreement between them and the NPF.

Who is responsible for the register of accredited non-state pension funds and who maintains it?

The list discussed in the article is maintained by the Deposit Insurance Agency (DIA). Initially, this organization was created, as its name suggests, exclusively for the formation of guarantee funds by banking organizations.

However, subsequently the scope of the DIA's activities was expanded. It is this organization that is entrusted with the responsibility to include insured non-state pension funds in the list and to exclude them from it. In addition, the DIA carries out the current management of the guarantee fund. The same organization manages the money in the event of an insured event.

In addition to the list of operating organizations, the DIA also maintains another list. This is a list of funds that have been excluded from the register.

Removals from the registry due to non-compliance are rare. Non-state pension funds are excluded on the basis of a reorganization consisting of their merger, which has become a common practice in the pension insurance market recently.

NPF activity control system

The current system of supervision and control over the activities of non-state pension funds is mainly built on indirect restrictions and a number of legislative acts obliging funds to comply with the rules established by the state. Among such control measures that directly relate to financial activities are:

• an exhaustive list of permitted assets in which a non-state pension fund can invest pension funds;
• annual audit of financial statements;
• annual actuarial assessment of the fund’s performance based on the sum of indicators;
• monthly (quarterly) operational reporting to the Federal Service for Financial Markets;
• annual publication in the media of the fund's performance results for the past financial year.

In accordance with the law, the activities of NPFs are controlled by: the Federal Service for Financial Markets, the Ministry of Justice, a specialized depository, and so on.

Despite all this, our Russian citizens do not have much confidence in NPFs. To a certain extent, such fears are fair, since the state bears subsidiary liability for the debts of the same Pension Fund - this is directly stated in the law. As for NPFs, until this year they had the status of non-profit organizations with all the ensuing consequences.

Fund guaranteeing pension savings

This fund is managed by the Deposit Insurance Agency. All money available in the fund and accounted for in a specific account opened with the Central Bank is a kind of guarantee of the return of rights and material investments of individuals.

This fund can be called the financial framework for guaranteeing the safety of pension savings.

The amount of the fund and guarantee contributions is strictly established. The rate is not constant and starts from 0.0125 , reaching 0.025 . These figures are set by the Central Bank, which has the right to increase up to 0.05 of the amount of accumulated money by a participating fund in the event that it is noticed that the fund’s funds have halved in one calendar year.

The sources of guarantee transfers are:

• profit from investment for the reporting year;
• if there is no profit, use your money to NPF;
• pension savings for individuals persons (if there are no other options).

The insurer is obliged to pay the premium by April 15 of the year following the reporting year. If he does not fulfill his obligations on time, the fund will be charged penalties, the amount of which is equal to 0.1% of the amount that was not transferred on time.

The money accumulated by the fund is used in two main directions:

1. covering the costs of ensuring uninterrupted operation of the guarantee system,
2. transfer of a guarantee upon revocation of a license from a non-pension fund.

Pension Savings Guarantee Fund

The work of the designated fund is fully subordinate to the DIA, and all funds that are accumulated in its accounts can later be used as a guarantee of the safety of all pension capital transferred by users.

Contributions for warranty support are formed taking into account a number of sources:

• income from investment programs for the reporting period;
• NPF’s own savings if investing does not bring any economic effect;
• pension savings of users, if there are no other options.

All contributions must be made before April 15 , otherwise the violator will face penalties in the form of a 0.1% penalty for each day of delay.

All funds generated by the fund can be used to fulfill obligations in the following areas:

1. Accrual of guarantee security if for some reason the work of the NPF was cancelled.
2. Covering the costs associated with ensuring the operation of the entire warranty system.

Sources of formation

Since NPFs regularly appear in the country, the volume of the fund regularly increases due to new revenues. The key mechanisms for the formation of guarantee funds include:

• contributions transferred by all non-state pension funds included in the fund;
• Pension Fund funds;
• penalties imposed on fund participants who do not fulfill their obligations in a timely manner;
• investment profit received from investments in various programs;
• financial resources, as well as other material resources transferred to the management of the fund;
• other sources of financing approved at the legislative level.

What is the fund made up of?

During the operation of a system that ensures the safety of pensions, the size of the guarantee fund should always increase, because it is replenished with contributions from newly arrived participants who are just entering the system. Thus, the main sources forming the guarantee fund include:

• penalties for failure to transfer funds on time,
• contributions from the Pension Fund,
• contributions from non-state pension funds included in the system,
• profit from investment,
• money and other property received by the Agency after payment of compensation under the guarantee,
• other income permitted by the laws of our country.

NPFs related to the system of guaranteeing pension savings

1. UralSib,
2. Agreement,
3. Future,
4. Heritage,
5. KitFinance,
6. Gazfond,
7. VTB,
8. National,
9. Sberbank,
10. Transneft, etc.