VEB reduced the unprofitability of citizens’ pension savings for 2022

The profitability of pension savings of citizens, which for 2022 was shown by the state management company (GUK) VEB, for the expanded portfolio was 9.7% per annum, for the portfolio of government securities – 10.24%, follows from the data of the GUK. Inflation for the whole of 2022 is fixed at 11.94%, Rosstat reported.

In 2022, it was quite difficult to achieve profitability at the level of inflation, given the surge in prices in March, the head of the trust management department explained to reporters VEB.RF Alexander Popov. At the end of 2022, income was provided mainly by coupon payments on bonds and proceeds from the placement of funds, he added.

In the first quarter, the management company earned 0.98% for both portfolios – inflation for this period amounted to 9.99%. In the first quarter, the management company earned 3.9% per annum on both portfolios – inflation for this period amounted to 9.99%. But already in the first half of the year, the yield was increased – up to 7% per annum on the expanded portfolio, and on government securities – up to 9.5% per annum. For 9 months, the yield was 7.7% and 9.3%, respectively.

VEB invests the pension savings of citizens in the Pension Fund of Russia (PFR), including “silent” – insured persons who have not chosen either a portfolio of government securities, or private management companies, or non-state pension funds (NPFs). In total, VEB manages 2.2 trillion rubles. pension savings for all portfolios. There are four of them – an extended one, a portfolio of government securities, urgent payments and a payment reserve. The management company estimates the number of “silent people” at 38 million people.

Income from the expanded portfolio in 2022 amounted to RUB 188.8 billion. (in absolute terms – the best result since 2016), for the portfolio of government securities exceeded 3.9 billion rubles. The total investment income from the savings of “silent people” and those who chose an expanded investment portfolio or a portfolio of government securities, accumulated since 2004, totaled more than 1.7 trillion rubles.

According to the results of 9 months of 2022, the profitability of the “silent people”, whose pension savings are managed by VEB, exceeded the income of citizens who prefer to trust the funds of NPFs, follows from the statistics of the Central Bank, which does not disclose the performance of individual players. In January-September, the weighted average return of NPFs on pension savings was 3.4%, and on pension reserves – 2.7%. The Central Bank has not yet provided data on the results of 2022.

The regulator associated the decline in the yields of private pension funds with a slowdown in the growth of the corporate bond market – this is the main investment tool for NPFs. The role was also played by the negative revaluation of shares in the portfolios of large NPFs, which did not resort to fixing the value of securities on February 18 or the acquisition date – previously the regulator offered this as one of the support measures, the Central Bank explains.

VEB took advantage of this relief. “Mainly from the point of view of not injuring and disturbing people once again: we already showed the best profitability in the second quarter, it was already higher than we showed at a fixed cost,” Popov said. The growth in savings in 2022 was almost twice the growth in 2021, he added.