By the end of 2015, Russians must decide whether they will retain the right to form the funded part of their pension in the amount of 6%, or refuse it and transfer all funds to the insurance part. In the first option, you need to go to a non-state pension fund (NPF).
NPF concept
A non-state pension fund is a special form of non-profit organization that manages funds without access to citizens' accounts. In fact, NPF is an alternative to the state investment fund Vnesheconombank. They also invest the savings of future retirees in stocks, bonds and other securities in order to generate income.
What is the meaning of the 2013 pension reform? Today, each employer makes contributions to the pension fund, 16% of earnings goes to the insurance part, 6% to the funded one. According to the reform, all contributions from Russians who do not want to transfer the funded part of their pension to the NPF will go to payments to current pensioners (to the insurance part), and the funded component will be zeroed out. In the FIU, such Russians are called "silent".
NPF advantages
By the end of 2013, more than 24 million Russians under 1967 were in favor of transferring their pensions to NPFs. The reasons why citizens prefer NPFs are associated with a number of its competitive advantages in relation to Vnesheconombank:
- this is the only way to preserve the funded part of the pension - with proper investment, it can significantly increase the future pension;
- the income received from investments of pension money from NPFs is higher than from Vnesheconombank, in 2013 the profit of the latter practically equaled the inflation rate;
- the funded part of the pension implies great flexibility in its management (for example, it can be bequeathed to any person);
- NPF clients always have the opportunity to track the status of their personal account through the online account.
Due to the inspections of the Central Bank scheduled for 2014 and the corporatization procedure, the reliability of the funds should increase. According to the law, even if an NPF goes bankrupt, it is obliged to transfer all savings to the Pension Fund, which insures their clients against the risk of losing pension money.
The advantage of the state fund is stability due to the possibility of investing only in state securities. While NPFs are available to invest in stocks and other securities, which makes their management of pension savings more risky. At the same time, the flexibility of NPF investment investments also leads to higher profitability.
How to transfer your savings to NPF
The first thing to do is to decide on the NPF. When choosing, it is worth considering such parameters as the experience of NPFs in the market, the total amount of funds under management and the amount of its own assets, the total profitability of the fund over several years, as well as reliability.
To transfer to an NPF, it is necessary to conclude an agreement with the fund (in 3 copies), write an application for the transfer from the Pension Fund to the NPF. The client will need a passport and SNILS. It should be noted that until the funds go through the corporatization procedure and are checked by the Central Bank of the Russian Federation, the admission of new clients is temporarily suspended.
