Savings in NPFs insured by government
Beginning from 1 January 2023, people’s voluntary savings in non-governmental pension funds (NPFs) will be insured for an amount within 1.4 million rubles against an NPF’s bankruptcy or cancellation of its licence. This will make the non-governmental pension (NP) system more attractive. The relevant package of laws has been signed by the Russian President.
Compensations will be paid from a dedicated guarantee fund of the Deposit Insurance Agency to be formed of NPFs’ annual contributions. The Bank of Russia will set the rate of such contributions depending on the amount of NPFs’ obligations under pension contracts, as well as individual indicators of each NPF’s financial stability and the quality of its assets.
The refund guarantee covers pension savings formed by customers from their personal contributions, employers’ pension contributions, and investment income. People will be able either to receive the refund within the insurance amount personally, or to transfer the money to another NPF at their discretion.
If a person has already started to receive a pension from an NPF as of the end date of the NPF’s operation, it will be paid further, but in an amount that shall not exceed twice the social old-age pension. The obligation to pay the pension will be assigned to another NPF selected on a competitive basis.
With the new guarantee system, six million people—participants in NP schemes will feel more confident in the safety of their pension funds. Furthermore, this will help attract new customers and increase the level of people’s pension benefits and confidence in the pension system. In turn, the development of the NP system will make it possible to form long-term investment resources in NPFs’ portfolios for the national economy.