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Tuesday, December 6, 2016

Siluanov was forced to save for old age


Finance Minister Anton Siluanov said at the St. Petersburg financial forum, that the fall of this year, the government, and then the state Duma will consider the proposals of his Department and of the Bank of Russia about the next pension reform. Instead contributions by employers to the mandatory funded pension which is likely to finally “freeze”, the future retirees will have to save for a decent retirement. For this you need to open an account in non-state pension Fund, which the government promises to insure. Moreover, part of the money will be allowed to use up to retirement age for other needs: for example, for the treatment. Most importantly, this contribution will be derived. However, it is doubtful that these ideas will be in demand.


photo: Gennady Cherkasov

The pension system accumulating “shakes” since 2002. Initially, the reformers decided to run money in it from two sides: insurance and cumulative. That is, each future pensioner is promised a large part of its sustenance from the insurance contributions to the pension Fund (they are now used to pay current veterans), and a relatively smaller, but depending on the size of his “white” the salary — contributory. Recall that while the employer is obliged to transfer to the Pension Fund 16% of payroll in insurance of 6% in the cumulative.

However, in the middle of the “zero” of all those born earlier in 1967 deprived the accumulation means. Everything went into the insurance part. Then came up with the so-called “points” system, under which we have to work longer to earn a pension that will at least not starve to death.

Finally, in the last three years, the funded part of pensions, the state froze, taking it in the budget. It is more than trillion, 150 billion went to the rescue of one of the largest state-owned banks.

The Ministry of labour for a long time already propose to abandon funded part of pension and 22% of all payments from the funds of the wages to send to FIU is nearly 400 billion additional rubles, or 20% of its annual deficit.

The Ministry of Finance and the Central Bank has long resisted. And did it not so much to protect the rights of citizens based on merit and not hungry old age), but because of the need for the accumulation of “long” money for investment.

Explain that savings and pensions can be placed in both public and private pension funds. The percentages were different: as below inflation and above at least 2-3% typically in structures that are close to infrastructure monopolies. So a lot of people placed cumulative part of it is in the past.

But in the last three years and these lucky people took the chance to save up for normal retirement. Recall that the average pension in Russia is slightly more than 12 thousand rubles.

The crisis apparently convinced the Finance Ministry and the Central Bank, which funded part does not hold, and the normal retirement do not provide. Like recently leaked, the Prime Minister has no money, and you hang on!”. From the end of April Anton Siluanov assures the public that 12-13 thousand rubles pension, the state will provide, even in the distant future, but the rest have to make themselves.

The scheme is as follows. Every citizen will have the right to enter into contracts with non-state pension funds in any amount. In principle, it is now possible. But, according to Siluanov, the money the state will insure. How, exactly, the Finance Minister said. But most likely, as in the case of Bank deposits, it will make the Agency for Deposit insurance (up to 1.4 million rubles, or even higher). Next: new pension contributions in contrast to the current cumulative can be inherited, and some of them by analogy with the parent capital can be used before retirement age, for example, for the operation. Therefore Siluanov calls his scheme “the pension capital”.

At first glance acceptable. The economy is a “long” private money, and therefore growth, which is needed to everyone: pensioners and workers. And future veterans accumulate “fat”.

However, the unanswered question: is it profitable this kind of investment? Interest income of private pension funds depends on too many factors: market conditions, staff development and permits States to certain purchase different kinds of securities. It can be even lower than inflation.

Here, for example, banal, Bank deposits, especially in state-owned banks, can provide a stable income, in any case, not lower inflation. So why risk your money? Siluanov that is not yet explained.

We can do it. It is in the best case, they say independent experts, is about socio-psychological factor. To save a little bit on the retirement account, not being able to spend before you reach retirement age most of the amount. The Russian population should be taught to save and not spend.

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