Long-term savings help increase NPFs’ portfolio
In 2024 Q1, pension reserves of non-governmental pension funds (NPFs) expanded by 1.6% to ₽1.9 trillion. The growth was driven by returns on investment and the inflow of funds under non-governmental pension insurance agreements and into the long-term savings programme launched at the beginning of the year.
Over January—March, nearly 270,000 people joined the programme. They have already contributed ₽2.4 billion. Pursuant to the rules of the programme, co-financing from the government will amount to over ₽553 million. Furthermore, according to NPFs, the participants are going to transfer more than ₽6.4 billion of pension savings to the programme.
The increase in NPFs’ pension savings slowed down largely because of the transition campaign of 2023. Specifically, 68,700 persons returned to the Social Fund of Russia (SFR), whereas only 6,200 individuals opted for NPFs. The SFR’s and NPFs’ portfolios of pension savings remained the same, namely ₽2.4 trillion and ₽3.3 trillion respectively.
Moreover, returns on investment of NPFs’ pension savings had been exceeding those of the SFR for the fifth quarter in a row. Weighted average returns equalled 9.7%. In particular, NPFs earned 7.0% on the broader portfolio and 8.4% on the portfolio of government securities. NPFs were expanding investment in federal government bonds while reducing the proportion of investment in corporate bonds and increased the portfolio of shares amid a rise in their prices.
More details are available in the Review of Key Indicators of Non-governmental Pension Funds for 2024 Q1.
