Reuters reported on the impending abolition of the mandatory funded pension


The Ministry of Finance and the Central Bank of the Russian Federation is already preparing to abolish the mandatory funded pension and the transfer of the funded pension system on a voluntary basis, according to Reuters. According to Agency sources to the new reform of the pension system the government encourages the reduction of budget revenues at low oil prices.

“The decision is still pending, but the Finance Ministry is discussing with the Central Bank the option of voluntary. I’m afraid that is not spaced [mandatory]. There is no money,” explained a Reuters source familiar with the discussions.

The fact of discussion of possible reforms was confirmed by the source Agency in the Ministry of Finance. According to him, the Agency understands that in its current form the system can not be wrong.

Deputy Finance Minister Alexei Moiseyev, in the Ministry responsible for pension reform, the opinion of an anonymous source refused, and the press-service of Central Bank reported that the Central Bank and the Finance Ministry “seeking arrangements under which the cumulative element of the pension system will be saved”, not becoming to clarify about voluntary or mandatory variants of this “element” is involved.

According to sources Reuters, a final decision on the abolition of mandatory funded pension may be taken only “at the top”, and while the authorities are debating what exactly this “pill” can be “sweeten”. Official taking part in the discussion of the pension reform, explained that the development of the voluntary pension system “will help to alleviate all the negative aspects associated with the abolition of compulsory”.

Previously for the introduction of the voluntary accumulative pension system was repeatedly made by the representatives of the social block of the government and, in particular, Vice Prime Minister Olga Golodets.

“The time has come to funded part of pensions was voluntary, so each person had a personal contract with a private pension Fund, private pension funds were responsible before the people for the full range of obligations and not at par as it is now,” — said Golodets.

In turn representatives of the Central Bank and the financial sector were in favor of maintaining compulsory savings. In particular, the first Deputy Chairman of the Central Bank Sergey Shvetsov in the spring of 2015 said that the development of the voluntary funded system is hampered by the lack of Russians culture accumulation. “The psychological barrier and the desire to spend money now not to overstep,” – said Shvetsov.

Later it was reported that the RSPP organized a closed meeting with representatives of large Russian business, the President of Russia Vladimir Putin has promised to preserve the mandatory pension system.

“The President said, “the Decision to cancel the cumulative part of the pension will not be”, — told Putin’s response one of the interviewees from the business community.

In April 2015 the head of the government Dmitry Medvedev announced that the cumulative element of the pension will be retained, which was seen as the promise to keep it a compulsory accumulative pension system.

However, since spring 2015 the shortage of budget funds has deteriorated markedly. Today “Vedomosti” with reference to officials from the government of the Russian Federation said that in the coming years the budget will not have enough money on transfers to the Pension Fund, the Ministry of Finance has proposed to extend the freeze of the cumulative part of the pension for another year.

An official from the Ministry of Finance, in turn, told “Vedomosti” that the Ministry of Finance together with the Central Bank continues to work on the concept of the pension system.