Goodwill pensions – Kommersant

The government at a meeting on Thursday supported the bill of the Ministry of Finance and the Central Bank on the launch of a new long-term savings program for citizens. Those who agree to participate in the program will be able to reinvest in it the funds of their previous funded pension, as well as form savings through new contributions and amounts transferred by the state as part of co-financing. Savings can be used after 15 years of participation in the program or at age 55 for women and 60 for men. Industry experts, while noting the benefits of the program, are cautious about its future popularity in the face of current uncertainty.

The government approved the launch of a new long-term savings program for citizens – the corresponding bill was presented by the Ministry of Finance at a meeting of the Cabinet of Ministers on Thursday. Prime Minister Mikhail Mishustin expressed hope that the new financial instrument would allow citizens to accumulate additional funds for their pensions, as well as have a reserve for special life situations. The head of the Ministry of Finance, Anton Siluanov, emphasized the macroeconomic side of the program – it should contribute to the inflow of long-term money into the Russian economy.

The project of long-term savings of the population actually replaces the former system of the state funded pension. Let us remind you that its formation has become mandatory since the 2000s – insurance pension contributions at a rate of 6% (out of a total of 22%) were directed for these purposes. However, already in 2014, the funded component was frozen by government decision. From that moment on, the formation of the pension rights of Russians proceeded only within the framework of the solidary pension system. Among the reasons that prompted the government to abandon the funded component are distrust in non-state pension funds (NPFs), as well as the need to balance the budget of the solidary part of the pension system.

Already in 2016, the Ministry of Finance and the Central Bank, following the recommendations of the World Bank (they believe that the most stable are pension systems in which income is formed from three sources – solidarity and funded parts, private pension insurance or life insurance programs), made the first attempt to create an alternative mandatory funded pension. Then the plans of departments did not receive government approval – in particular, because they intended to include the population in new pension programs “by default”, that is, without fail.

The current project of the Ministry of Finance and the Central Bank, on the contrary, involves exclusively voluntary participation in the savings creation program. Its participants, in addition to the opportunity to make new savings, will also get access to the funds that they managed to generate before 2014 if they make them as a first installment for a new program under an agreement with NPFs. Program participants will be able to claim payments at the end of the contract period (15 years) or upon reaching the age of 55 for women and 60 for men. Savings can be received ahead of schedule – in some “difficult life situations.”

To lure citizens into the new program, the state has prepared “gifts”. It will co-finance savings over the first three years, adding up to 36,000 rubles. in year. Participants of the system will be able to issue an annual tax deduction of up to 52 thousand rubles. when paying contributions up to 400 thousand rubles. in year. Finally, they are promised savings protection – the guarantee system will be the same as for deposits, but with twice the insurance amount – 2.8 million rubles.

As explained in the Ministry of Finance, any adult citizens will be able to use the program. A long-term savings agreement can also be concluded in favor of a child or any other person, regardless of his age. The contributions will be invested in OFZs, infrastructure and corporate bonds, and other reliable securities. A citizen will be able to conclude contracts with several operators, the Ministry of Finance explained.

According to Galina Morozova, Chairman of the Board of Directors of NPF Future, the long-term savings program can take an important place in the NPF product line, as it will allow them to offer customers a product that has a number of advantages, including tax deductions, co-financing and government guarantees. Nevertheless, according to the forecast of Galina Morozova, the Russians are unlikely to start actively investing in the new program before 2025-2026. She believes that in the face of uncertainty, even with all the incentives, the program is unlikely to be in high demand so far.

“The investment horizon has been shrinking for more than a year, and a likely increase in rates will make deposits understandable to everyone attractive again,” says Olesya Kirilenko, head of product development at Ingosstrakh-Investments Management Company. She emphasizes that the success of the initiative will largely depend on how actively the state will instill in the population an understanding of the need to create savings, acquaint them with how such tools work, and explain what their advantage is compared to traditional ones.

Anastasia Manuylova