Economy

Russian system of pensions should be supplemented with corporate funds

AEB conference about Pension

Association of European Businesses (AEB) invited the most prominent experts on pensions on December 20, 2016. Support of the meeting was carried out by “SAFMAR”.

The Chairman of the Committee of the AEB insurance and pensions A. Lorenz provided an opportunity for each of the participants to express a view on the future of pensions in Russia, because “now a new trajectory of the system development is searching”.

The dialogue on pensions in the AEB began in 2011. This year, perhaps, in all the statements was mentioned that the Russians should be expecting hard times, especially those who are completely provided by state pensions. And there came the call to all companies having the opportunity to create corporate pension funds to use the opportunity, taking care of their employees.

On the question how much should be the average pension to reach the average European standard of living, the Deputy Director of the HSE Institute for social policy Oksana Sinyavskaya said the amount is about 40’000 (2-2.5 the minimum wages), but to achieve this it is not possible with the current difference in salaries. She also stressed that the ageing of highly skilled personnel, which we see today on the Russian labour market, creates a demand for the retirement programs.

Partner at PwC, Karina Khudenko said that those companies who pay their employees wages above the national average should “engage in paternalism” and seek partners for pension funds. The pension proposals are not often perceived by young employes as a factor in hiring, but the approaching retirement becomes in employes’ eyes a competitive advantage. Because the Russians, earning 100’000 at retirement, will receive an allowance in the amount of about 8% of salary. More and more Russian companies are thinking about the creation of corporate pension funds.

For foreign companies the harmonization of the Russian market with the global is a driving factor. So the accumulation of funds practiced in the world comes in their Russian subsidiaries.

Director of business development of “Raiffeisen Capital” Igor Kobzar proposed to diversify the retirement funds in the currency in the long term.

Executive Director of “SAFMAR” Evgeny Yakushev talking about non-state pension funds (NPF) named such a market trend as the consolidation of its players. Currently 9 pension funds in Russia own 90% of pension assets of NPF, while NPF number falls. Also he mentioned the trend in transfer of savings to private management.

The President of the self-regulating organization “Association of NPF” Sergei Belyakov drew attention to the fact that pension market depends on the general model of economic development of the state. At the moment it is not still exactly defined. According to S. Belyakov, currently the Russian government is considering 2 concepts: sustainable development or extensive growth within existing resources. If the government chooses the second of them, the pension fund can be used for other government projects.

By the way, V. Putin said at a press conference on 23 December 2016, the General economic strategy of Russia’s development until 2025 will come in May 2017. And the final fate of the pension Fund, according to panelists at AEB, will be solved in 2018.