After three consecutive years of freezing the pension market and the society began to doubt that this part of the pension will continue to exist. While the social block of the government lobbies for the transfer of the funded on a voluntary basis, financial and economic studies the mistakes of the past and intends to save cumulative.
Expected in the next two years, the Russian pension system will have to change to meet new challenges. Raising the retirement age and company pension products, said Deputy Finance Minister Alexei Moiseev in an interview
– There is much talk about whether the funded pillar of the pension system, and how do you assess the need?
The cumulative part of the clearly necessary and the Finance Ministry was in favour of its preservation. In General, the cumulative item based on our demographic projections, this is the only way for us to balance the traditional sources of pension.
Topilin: raising the retirement age of officials is planned for 1 January 2017
On the background of neutral or even negative demographic trends in Russia, when the life expectancy in retirement has increased by 4-5 years, the only way that we have designed and implemented is the introduction of the funded part. To save money during the life and then on this money to live on after retirement.
And, after all, what is the fate of the funded pension in Russia?
Funded part was, is and will be, there’s no getting around that. We have now funded part, in fact, has two-and-a-half format. One format is OPS (mandatory pension insurance) and a voluntary pension provision, the third format is universal life insurance.
Why do I call this half of the format – because, unfortunately, from the point of view of its penetration in the mass and volume of insurance premiums, it is ten times less. But I hope that the life insurance will continue to evolve, but for now, if we talk about serious savings that can be measured as a percentage of GDP, that is, of course, OPS and voluntary pension provision. While there are problems in each of these formats.
– In the mandatory part of pension what problems are we talking about?
OPS is the most regulated part of the retirement market, but there are some shortcomings. Let’s just say the probability of “freezing” the next year is not zero. Obviously, this is an unstable system, since no financial system cannot be sustainable if it does not attract funds for three consecutive years. That is, in a situation where pension funds will pay the money but will not invest the newly incoming funds, they will simply become a box office and gradually will be phased out and out of the market. This, among other things, greatly increases the motivation of their owners to conduct unscrupulous business.
As a result, we now have encountered a range of issues associated with the problem of neuregulirovannost “dobrovoljci” and probabilistic lack of revenues in the OPS. Therefore, we can say that we are now at the very beginning of brainstorming.
In the voluntary part of the pension still worse?
Problems with voluntary pension provision is related to the fact that it is, in fact, now managed as the saying “at sixes and sevens”. There are programs that promise a junction or joint and several nature, when employees pay for the pensions of people who already left the company, accordingly, with the expectation that they will pay also. This is a typical joint and several scheme that is generally very harmful, because we state to distribution system add corporate distribution system. In this sense, we are the demographic trends that I mentioned earlier, only compounded.
The second problem with the “dobrovolcu” associated with the fact that, unfortunately, the cleanup, which took place in the compulsory pension insurance, there has not yet begun. Strictly speaking, we don’t know what’s going on. Now all pension funds, who receive OPS, have gone through the corporatization and verification of the Central Bank and went into the insurance system.
Some of the funds, the same funds motylewski, as you know, is not included. In the “dobrovolcu” this process of ordering the market yet. We have an order Shuvalov by 2019 to enter a divestiture and guaranteeing in the segment of the NPF. So now we are starting to think about it, 2019 is not so far away as it may seem.
There is a third problem that, say, our balance is reform of remuneration. We started back in 2013, now we have to bring this issue to the end.
– Earlier you said that the relevant law can be adopted in the autumn session
This bill has progressed, we submitted to the government, expected that before the end of January it will be submitted to the state Duma.
– Do I understand correctly that the funds, which operate in the segment of voluntary pension provision will be introduced into the insurance system?
The entry of such firm in the insurance system is not yet a fact. We have an order to work it through, but the decision still to be taken. From my point of view, the incorporation of such SPC must pass. Because the divestiture allows us to understand the ownership structure of the beneficiaries, respectively, if suddenly it turns out that the stolen Fund, it is clear who is to blame. In addition to “dobrovolcu”, in my opinion, it is necessary to conduct Supervisory review, which took place in OPS.
Golodets: 2018 raising the retirement age will not be considered
– What do you see as solutions to these problems, are there already any ideas or initiatives?
We don’t have any bills, even the concepts, but there is an understanding that we must come up with a way to combine these two standards funded pension, simultaneous quality improvement of the standards of regulation in the voluntary pension and combined for pensioner savings available in OPS with his future contributions to “dobrovolcu”. How to prescribe how to resolve all legal incidents, how it to make – and now will be discussed. We understand that this is a huge legal problem, but probably not more than the privatization of the NPF. In the presence of good will of all parties in the beginning of next year we will begin to discuss it.
If we talk about the latest initiatives in General in the pension segment, we are now discussing the need to resume the draft law on pension schemes that had been prepared, when Russia was actively engaged in the OECD in 2013.
It needs to be updated, somewhere to tweak and re-run. This bill says that the pension product can sell anyone who has the proper license, subject to the execution of certain rules. It can be not only NPF, but also the insurance company or banks that have their own pension funds.
– Tell me more about these retirement products…
Citizens should have more freedom of choice when planning their retirement. For example, the choice between a lifelong pension and pension for a fixed term. So, if a person agrees to a lifetime of payments, respectively, he renounces the inheritance, but he can live in retirement as many years and get one set payment throughout retirement age. Either the man himself (!) appoint yourself a deadline, say 10 years. Then payments are obtained by the principle of “mortgages in reverse”: the payment will be more and calculated on the basis of the amount of surplus subject to the investment plus investment payment reserve.
– Is it foreseen in the bill, the opportunity at retirement to receive the full amount in full?
No, then it is not a pension, it is the management of your wealth. How will you live if you get the money?
– Buy a mini-hotel in Sochi, for example, and I will take free…
Great idea, but the pension is still maintaining your regular income during the period after you stopped working. We propose to decouple the commencement of payments from accumulative pension age. In this case, a person can start receiving money from your pension then, when he really retired.
– This is also stipulated in the draft law on pension products?
This is not a bill, it is our firm position that we are trying to defend. But while many viewed this as a “creeping” increase in the retirement age. We believe that if a person saves himself, and he’s 60 years old full of energy and wants to work another 10 years, as many do, then why can’t he continue to save and then, when is he going to retire, why not get a significantly larger pension. But we are yet.
– By the way, about raising the retirement age. This idea is one of the most controversial of the last few years.
Raising the retirement age – is, first, fiscal need, and secondly- a demographic necessity. The health of people now in retirement is significantly better than it was before. The pension age of 55-60 years was set in the 30-ies and does not fully correspond to current conditions. Living conditions have since changed significantly also, and finally, even from the point of view of enhancing social protection for people in retirement age on a job very, very difficult.
Now we have to watch how many people live when retiring. We people are living in retirement longer than 10-15 years ago, and health in the 55-60 years better than their 10-15 years ago. The majority of people we know and who are at this age, they are quite willing to continue to work.