Article navigation

What does “freezing funded pension” mean in simple terms?

Based on the difficult economic situation in the context of the budget deficit, the Government of the Russian Federation introduced a temporary restriction on. This forced measure is intended, in the opinion of the Government, to stabilize the budget of the Pension Fund. Now part of the contributions that were previously directed to the accounts of non-state pension funds (NPFs) and management companies (MCs) involved in the formation of funded pensions, directed exclusively to the insurance pension.

As Russian government officials explain, "freezing" funded pensions in no case is not a withdrawal, as is often said in non-professional circles.

It is also assured that the abolition of funded pensions in connection with the introduction of a moratorium is not expected, and all pension savings of citizens after their "defrost"(which someday will happen) will definitely be returned to their accounts in the NPF. It was promised that the funds accumulated during the period of the moratorium would also be taken into account and indexed.

Photo pixabay.com

Why do we need a moratorium on the formation of pension savings?

Extension of the moratorium for 2015 - 2020

Late ban on the transfer of insurance premiums for the formation funded pension was extended for 2015 in accordance with Federal Law No. 410-FZ dated December 1, 2014. This year is notable for the fact that from January 1 it started working, in which funded part was brought into an independent type of pension along with insurance.

For 2016, the restriction on the transfer of funds to the funded pension was extended by the adoption federal law No. 373-FZ of December 14, 2015. This year, the decision to extend the moratorium on pension savings was taken by the Government against the backdrop of other measures aimed at saving budget funds. Among them are:

• cancellation of indexation of pensions for working pensioners;
• indexation of pensions not to the level of inflation set for 2015 (12.9%), but only by 4%.

In 2016, due to the stabilization of the economic situation and the return of the Government to three-year budget planning, the moratorium on the formation of pension savings was extended immediately for the three-year period 2017-2019. in accordance with the law of December 19, 2016 No. 447-FZ.

It is already known that the corresponding measure will be extended to 2020. Thus, at least until 2021, all funds credited to the personal accounts of citizens in will continue to be directed only for the formation of an insurance pension. Does this mean the end of the cumulative pension system?

Is there a future for funded pensions?

The Ministry of Finance of the Russian Federation submitted to the Government on the further reform of the pension system, including those related to the formation of funded pensions. It is proposed to form pension savings for on a conditionally voluntary basis.

• That is, citizens, if they wish to receive a funded pension, will independently direct part of the funds from their salaries to non-state pension funds bypassing the FIU.
• At the same time, the funds will be directed exclusively to the PFR budget for the formation of an insurance pension (just as it is happening now during the years of the moratorium on the formation of pension savings from mandatory insurance contributions paid by the employer to the Pension Fund).

Based on destructive trends in the socio-economic sphere Russian Federation Against the backdrop of sanctions pressure from outside, the absence of positive changes in the production sector and disappointing forecasts for the future, it is obvious that the funds in savings accounts with NPFs will continue to "freeze" until the Government finds other sources of replenishment of the state budget and reduction of its expenditures.

Will the moratorium affect future pensions?

The unconditionally introduced and twice extended moratorium cannot but affect the size.

• Before the so-called "freeze" of funded pensions, the money of future pensioners could be placed through the NPF and the UK in financial markets, that is, could be invested in various economic projects.
• The degree of profitability of investing financial resources depends on many factors, the defining of which is the professionalism of employees of non-state funds.

All this may also affect ordinary citizens in the form of loss of investment income by persons who have concluded contracts for accumulative pension insurance with NPFs in connection with the bankruptcy of some of them against the backdrop of the crisis.

Conclusion

When the frozen savings will be transferred to NPFs (and whether they will be transferred at all) is not yet known.

A further extension of the moratorium on the formation of funded pensions until 2020 inclusive undermines the confidence of the population in the Government of Russia and, in conditions of difficult access to external financial resources, creates difficulties in the domestic financial market (since management companies and NPFs are engaged in investment activities in the domestic market of the country).

After the “freezing” of accumulative pension programs, investment activity has significantly decreased, which will definitely lead to an increase in interest rates on loans for enterprises and the population. And this, in turn, can slow down the development of the industrial sector of the economy, which is already in a deep crisis, and lead to a further reduction in jobs and wages, and, consequently, revenues to the PFR budget.

The economic crisis affected the funded pension of every able-bodied citizen born in 1967 and younger. According to the Government's plan, the funded part was to be resumed from 2015, but the freeze is being extended to this day and will also be in effect in 2017. What is the essence of freezing and what will it lead to? - We will understand this material.

What is freezing?

According to preliminary calculations, thanks to the freezing of the NC, the federal budget in 2017 will be replenished by 400 billion rubles.

The authorities promise to account for part of the lost funds in the form of points at retirement, which will completely depreciate by retirement age, or pension reform will change again.

But why did the reform to introduce the funded part not work?

LF has been introduced since 2002. Savings were formed by citizens born in 1967 and younger. The percentage of deductions was 6%.

Every citizen who had savings could transfer these funds to the NPF (non-state fund) or to the UK (management company), where the profitability is higher than in the state-owned Vnesheconombank.

However, the PFR's financial balance began to go negative. Therefore, in 2014, the Government decides to freeze the LF.

The essence of freezing

The essence of freezing the bass (accumulative part) is as follows:

• replenishment of the budget to address the difficult economic situation starting in 2014;
• financing of the Crimea;
• spending on the defense industry of the country;
• current payments to current pensioners.

But at the moment, there is not a single document where all the expenses that were incurred at the expense of the NC would be registered.

But will it be returned to the citizens of the country of LF?

No, since the frozen NC amounts will be transferred to pension points when calculating an insurance pension.

Until 2019, the state plans to develop a new pension reform, according to which the funded part will become the basis of pension payments.

That is, the authorities want Russian citizens to independently form the majority of future pension.

NPFs and the freezing of pension assets

Decision about the freezing of LF shocked the market of NPFs (non-state funds). This measure led to the fact that most NPFs simply ceased to exist.

In addition, the authorities have established that all NPFs are required to go through the corporatization and guarantee procedure (joining the state system), as well as to undergo an audit by the Bank of Russia.

And only about 20 funds have confirmed this condition at the moment. It is the remaining NPFs that accumulate 86% of the market.

Such funds include, for example, NPF Lukoil-Garant, Promagrofond, Sberbank, Kit Finance.

Will there be an extension of the suspension in 2017?

At the end of 2016, a draft law was submitted to the State Duma, according to which the freezing of the LF (accumulative part) is extended not for one year, but for three - until 2019. As a result, this project was approved at the end of October.

The essence of this law is as follows - employees of the PFR are required to take into account all contributions received from employers only to finance the insurance pension.

In addition, this government decision will help save more than 400 billion rubles in the federal budget in 2017 (455 billion in 2018; 500 billion in 2019).

Will the further cancellation of the NC affect the size of the pension?

Yes, because the funds invested in the NPF or the Criminal Code could bring a significant increase in pensions over several years. As a result, the loss of investment income reduces the size of the future pension.

In addition, many government officials claim that lost NC funds will be returned to potential retirees in the form of points. In fact, the accrued points for the lost NP in 20 years will be almost completely lost due to annual inflation or due to ongoing changes in the pension reform.

AT this moment The Ministry of Finance together with the Bank of Russia are developing new law pension reform project.

The main objective of the new reform is independent formation pensions by citizens of the country.

The reform is planned to be implemented no later than 2019.

Based on the information presented, it can be concluded that the authorities are not going to return the funded part of pension payments. At the same time, in the near future, the LF will be completely canceled. After all, the Government is developing a new pension reform project, thanks to which the majority of citizens will be able to independently form a large part of the pension.

The host of RBC news will tell you more about this topic in the next video.

The new reform will be successful among the country's citizens if the state stops making changes to the pension reform every year, and if the new bill is understandable to every potential pensioner.

Citizens who have fallen under the increase in the age of pensions will be able to receive its non-state part according to the old rules - from the age of 55 for a woman and from 60 for a man.

At the same time, this applies only to those contracts that were concluded before December 31 of the last year.

An increase of 3.3 thousand rubles

According to the publication, in order to assign a personal pension to private funds, you need to make sure that the Russian does not receive payments from the country's Pension Fund. The beginning of personal and state pension payments in this case may not coincide.

“The Ministry of Labor stressed that the increase retirement age should not apply to agreements previously concluded with NPFs,” the publication says.

Members of the NAPF asked the department to clarify the situation with clients in the framework of non-state pension provision. Private funds for the appointment of a personal pension must confirm that the citizen has grounds for this c. Now, the start age for personal and public funds may not be the same.

The Ministry of Labor said that they are studying the possibility of extending the practice to new agreements.

That is, for contracts concluded after January 1, 2019. The Ministry of Labor requested a position, and in order to assess the socio-economic consequences of such a step. The Central Bank noted that under the new pension agreements, the age of payment assignment will gradually increase.

Now in Russia, 4.6 million people form a non-state pension, the total amount of their funds at the end of 2018 was estimated at 800 billion rubles,

Of these 4.6 million citizens, 40% have individual contracts and save for retirement themselves, without co-financing from a third party, such as an employer. The rest are participants in corporate pension programs.

According to the Central Bank, at the end of the third quarter of 2018, 1.5 million citizens received non-state pensions.

The size of the non-state increase in pensions amounted to an average of 3.3 thousand rubles per month.

Freezing saved 2 trillion rubles

At present, the average pension in Russia is 14.1 thousand rubles. From January 1, 2019, the average monthly increase in the old-age insurance pension for non-working pensioners amounted to 1 thousand rubles. That is, the indexation of pensions this year will be 7%. In 2020, it is planned at the level of 6.6% and 6.3% in 2021.

By the way, the Pension Fund of Russia has money for indexation not only due to income, but also due to the freezing of pension savings of some employees. Recall pension provision of Russians is built on the insurance premium (22% of the salary), which is divided into two parts: 16% - insurance, it goes to the FIU. And 6% of the salary is a funded part that can be transferred to non-state pension funds (NPF) for investing in securities in order to generate additional income.

Recall that in 2014 the authorities decided to temporarily freeze pension savings for a year. Since then, contributions to the funded part of the pension in the amount of 6% of the salary have been used to pay current pensioners.
Then the freeze was extended for another year. Last year, the freeze on pension savings was again extended. Until 2020 already.

As the Minister of Labor and Social Protection stated at the time, the freeze helped to save about 2 trillion rubles. On December 5, 2018, he approved a law extending the freezing of funded pensions for three years ahead. The law will affect those who were born after 1967 and voluntarily submitted an application to the FIU for the formation of a funded pension. Before the adoption of the law on freezing, citizens could manage the deductions on their own: send them to form their own pension savings or transfer them to the insurance part, increasing the points for calculating their insurance pension.

After the freezing of pension savings, citizens began to complain that the state had deprived them of the right to manage their own pension. In response, the authorities proposed the concept of individual pension capital (IPK). At the same time, the insurance part of the pension remains unchanged, and the funded citizen (and not the employer) will accumulate himself and will manage it himself. We are talking about those citizens who, against all odds, will believe the state and start saving for old age under the supervision of the authorities.

Russians do not expect to live on pension alone when they reach the age of incapacity for work. According to a survey conducted by the SuperJob recruiting agency, a third of Russians intend to work in retirement, 19% of respondents rely on personal savings, 3% rely on the help of children, and about the same number on investments in non-state pension funds (NPFs). Among other income options, respondents suggested receiving funds from the rental of real estate, the sale of household products and handicrafts.

Only 16% agree to live only on the state pension.

At the same time, the average pension that Russians would agree to is 37.3 thousand rubles a month. It is noteworthy that in 2016, during a similar survey, this figure amounted to 35.2 thousand rubles. At the same time, men have requests for three thousand rubles more than women: the representatives of the stronger sex would like to receive 38.9 thousand rubles in retirement, their second half - 35.8 thousand rubles.

Now, at the government level, the further existence of the domestic funded pension system is being decided. Let's take a look at what's new pension legislation: current and planned modernization of pension relations. Including the new law on pensions in the Russian Federation. what awaits candidates for pensioners in 2020.

To be or not to be savings in retirement

The benefit, according to the next pension reform, should consist of several components:

• basic;
• insurance;
• cumulative.

The latter was to be formed from the personal savings of citizens. However, in view of recent changes the state financial policy has also changed in the country's economy.

The funded part should be formed taking into account the period of work of the future pensioner and the amount of his salary. The amount of deductions sent to a person's personalized account depends on these parameters.

It is theoretically possible to use such savings in various ways:

1. The first is the redirection of the money formed on the account by transferring it to the NPF. The latter can multiply the money received. Why the managing organization sets the interest offered for placement and financial management. Some NPFs offer trust management of savings by investing in mortgages, securities, and various bonds.
2. In addition, such benefits can be received in installments on a monthly basis or as a one-time payment if the amount of savings is insignificant.
3. Also, funds from the PFR can be transferred to improve housing conditions or treatment.

Attention. Funds maternity capital a woman who owns an MSC certificate is still entitled to transfer to the account of the future funded part of the pension.

But she will not be able to use this money until 2021. The moratorium on freezing the funded part of the pension has been extended until 2021.

What does “freeze” funded pension mean?

According to the assurances of the Deputy Prime Minister of the Government of the Russian Federation - O. Golodets, transfers from the budget to the Pension Fund to finance the item "contributory pensions" are not provided for in the near future. This implies that until 2021 inclusive this allowance will be frozen.

The freezing of pension savings means that the Russians will not be able to exercise their right to receive (withdraw from the PF account) their money. Not all funds, namely those that were sent by them to form the funded part of the pension.

This is not only about state allocations under the program to promote the increase in savings, when the state promised to double all replenishment of the funded part of the pension. But also about the Russians' own savings, which they independently set aside for their future pension through the Pension Fund.

Important. For at least 2 years, the Russians of the Russian Federation, who go on a well-deserved post-work rest, who have chosen the funded pension option, will not be able to use their savings.

The stages of "freezing"

In fact, the funded part of the pension ceased to be formed back in 2014, when the first decision was made to “freeze” savings. Since then, Russians have no real opportunity to manage their own savings.

1. In 2014, “freezing” such a pension was considered a one-time measure.
2. In 2015, it was decided to extend this procedure.
3. 2016, the financial moratorium continued to exist.
4. Its final validity has been extended until 2021.

Important. Measures such as a pension moratorium are considered stabilization procedures for both the pension system and the budget, the financial system of Russia as a whole.

Where do the funded pension funds go?

According to representatives of the Government of the Russian Federation, the frozen money is directed to insurance payments. Thus, the funds are not completely withdrawn from the financial system of the Pension Fund and other pensioners use them.

In addition, such measures do not mean the complete withdrawal of money belonging to individuals. After the abolition of these measures, all savings will return to the accounts of their owners in the Pension Fund and will be indexed. It is assumed that after the “freeze” is lifted, people will be able to cash out their savings.

The essence of the "freeze" funded pension

In the course of financial and legal modernization, serious difficulties arose due to the fact that 6% of the volume of contributions transferred by insurers to personal accounts of citizens in the Pension Fund began to be redirected to the NPF and the Criminal Code. That is, in fact, the money left the financial turnover of the PF, which led to a real decrease in the volume of cash receipts.

It was in view of the revealed shortage of pension funds and the impossibility of patching holes in another way that a decision was made to “freeze” pension savings.

Important. The "frozen" money is sent to current pension payments, the implementation of anti-crisis procedures and the maintenance of the state's financial system.

Pension moratorium in 2016-2022

Decisions to extend the moratorium in 2016-2022 on pension savings were taken by the Government against the backdrop of other measures aimed at rational spending of budgetary funds.

These include:

• cancellation of previously existing indexation for working pensioners;
• indexation of post-work benefits not at the inflationary level, starting from 2015 (in the amount of 12.9%), but only by 4%. In August 2016, there was a general replacement of indexing lump sum payment in the amount of 5 thousand rubles. Pensioners received this amount already in January 2017. From January 1, 2018, the insurance pensions of non-working citizens were indexed by 3.7%. Social pensions in April 2018 were indexed by 4%. And in January 2019, the indexation of pensions for non-working pensioners again took place, its size was 7%. It is planned that by 2024 the pension will be indexed by 35% and its average amount will be 20,000 rubles;
• covering the PF budget deficit from the federal budget (as a result of which unplanned expenses and a shortage in the state budget are formed).

In 2016, the restriction on the transfer of money towards pension savings was also extended for all funds credited to the personal accounts of citizens insured in the OPS. Until the end of last year, they were directed only to the formation of an insurance pension.

As for 2017, the Ministry of Finance of the Russian Federation submitted a number of proposals to the Government on further reforming the pension system, including the formation of funded post-work benefits. It was proposed to form savings on a conditionally voluntary basis:

• Russians would be able to independently send part of the money from their salary to the NPF, bypassing the PFR,
• money transferred by employers in the form of pension contributions would be directed exclusively to the PFR budget. To a personal personal account in PF. It was assumed that future pensioners would be able to regulate the amount of deductions on their own.

But, judging by the latest disappointing trends, savings will continue to be "frozen" until the Government finds other methods of forming and reducing the excessive costs of the state budget. Therefore, in 2017, this category of benefits still remained frozen.

Important. Back in 2016, the Pension Fund adopted the budget, taking into account the freezing (moratorium) of post-work benefits for 3 years, in connection with which the funded pension in 2017-2019. was not formed.

Since January 2019, a new pension reform has started in Russia, it provides for an increase in the retirement age of citizens. Against the backdrop of the reform, the pension moratorium was again extended. Moreover, it became clear that its abolition is not planned at all, since the development of an individual pension capital system has begun. Such a system will replace the funded pension. It implies the introduction of individual personal accounts, where the future pensioner will voluntarily transfer contributions.

Will the moratorium affect future pensions?

The repeated introduction and extension of the moratorium could not but affect the volume of subsequent post-work benefits.

This is expressed as follows:

1. before the "freeze" of this kind of benefits, the money of future pensioners could be placed through the NPF and the UK in the financial markets, that is, they could invest, invest in various projects,
2. the level of profitability of investing money depends on many factors, not least among which is the professionalism of the NPF personnel,
3. after the introduction of the moratorium and the transfer of accumulated funds to the PF budget, the return on deposits is close to zero (the official return on VEB deposits is 3%), and if we take into account the significant indicators of inflationary processes in the Russian economy, it may become negative.

Last changes

The moratorium on freezing the funded part of the pension has been extended until 2022 inclusive. The corresponding decision is indicated in the approved budget of the PFR for 2020-2022.