Regulatory framework for early-retirement occupational pension schemes developed

The Bank of Russia has approved standard documents (Bank of Russia Ordinances  No. 5237-U and No. 5238-U, dated 23 August 2019) required for the launch of early-retirement occupational pension schemes. Employers may establish such schemes for their employees working in hazardous and harmful conditions.

A standard agreement between an employer and a non-governmental pension fund (NPF) should specify the amount of contributions payable by the employer for early-retirement occupational pensions in accordance with its scheme. Such contribution should amount to at least 2% of the salary of an employee working in harmful conditions, or 4% — for an employee engaged in hazardous production. The pension agreement should also stipulate the rights and obligations of the parties thereto, the contribution payment procedure, grounds for receiving occupational pensions, the procedure for pension calculation and its payment to legal successors, etc.

Where a scheme provides for employees’ voluntary contributions for their future early-retirement pensions, the pension agreement should set the contribution payment procedure and terms.

According to the approved framework, the standard pension regulations on early-retirement occupational pension schemes should describe the uniform procedure for applying for and assigning occupational pensions and the procedure for the calculation and payment of the redemption amount. All NPFs implementing early-retirement occupational pension schemes should comply with the above procedures.

In addition, the standard regulations should stipulate the procedure for paying contributions to NPFs, pension scheme participants’ rights and obligations, pension schemes applied by NPFs, the procedure for calculating and further adjustment of occupational pension amounts, the procedure for assignment and payment of such pensions, etc.

Pension regulations are NPFs’ internal documents.

The approval of the Bank of Russia Ordinances implies that the regulatory framework for the launch of early-retirement occupational pension schemes has been developed in full. Earlier, the Government of the Russian Federation approved the employer’s standard early-retirement occupational pension scheme.

The Bank of Russia Ordinances were registered by Russia’s Ministry of Justice and become effective on 9 November 2019.