"Creating incentives": the Ministry of Finance announced a new scheme for the formation of pension savings

The Ministry of Finance of Russia reported that the department has developed a new system of voluntary pension savings. The document has already been sent for approval to the Ministry of Labor. The bill has the working title “On the Guaranteed Pension Product”.

“In the near future we plan to submit a bill for public discussion with the professional and expert community, after which it will be submitted to the government,” the ministry reports to RIA Novosti.

It is noted that citizens will be connected to the new system exclusively on a voluntary basis. In addition, the state will guarantee the safety of long-term pension savings, tax benefits will be provided for businesses, and tax deductions for citizens. Savings accounts of citizens will be registered by the central administrator.

Also, under the new system, citizens will have the opportunity to add savings from the mandatory pension insurance system, which is currently in force, to the guaranteed pension product.

“The main goal of this bill is to create a state system to guarantee the safety of voluntary pension savings of citizens, to create incentives for both the independent formation of such savings by employees, and for the development of corporate pension programs,” RIA Novosti quoted the Finance Ministry as saying.

Individual Retirement Capital Concept

The new system should replace the concept of individual pension capital (IPC), which has been developed since 2016 by the Ministry of Finance and the Central Bank of Russia. Then it was assumed that the old system of pension savings would be dismantled and completely transferred to the IPC program. However, due to disagreements between the Central Bank of the Russian Federation and ministries, as well as due to the implementation of the pension reform in the country, it was decided to change the concept.

“The issue of the IPC was suspended due to the fact that pension changes were going very hard. Therefore, we hope that now the passions will settle down, now the situation, thank God, has been decided. We have made many reciprocal steps on pension changes, we have softened in many respects the proposals that were originally formulated, ”RBC quoted the words of the head of the Ministry of Finance Anton Siluanov.

The idea of ​​the PKI itself suggested that the citizen himself would form his pension savings. Contributions, starting from the first year a person was included in the system, it was recommended to gradually increase to 6% of the salary. However, the employee could choose a different percentage at his discretion. Contributions had to go to non-state pension funds (NPFs) and belong entirely to the citizen, in addition, they were exempt from personal income tax.

Initially, the IPC concept involved auto-subscription, that is, citizens were automatically included in the system and could exit it at their own request. However, it was subsequently decided to make the entry into the system completely voluntary.

Such a system has some drawbacks, according to the lawyer for labor disputes, the head of the Department of Labor Law and Social Security Law of the Higher School of Economics, Doctor of Law, Professor Marina Buyanova. According to her, this type of insurance is less reliable.

“An individual pension capital is social insurance, and, of course, the funds that each person has accumulated on an individual pension account can be spent not only on the person himself, but also in the event of his death, are transferred to other pensioners. This is the so-called "relay race of generations." In this regard, social insurance is less secure, ”she told RT.

Advantages of the new system

The modern pension insurance system is ineffective, and the funded part of the pension must be transferred to voluntary principles, which suggests a new project, said Yaroslav Nilov, chairman of the State Duma Committee on Labor, Social Policy and Veterans' Affairs, said.

Recall that the modern pension insurance system divides the pension into insurance and funded. An insurance pension is formed from the funds transferred by the employer to the employee’s account in the Pension Fund of the Russian Federation, but it is spent on current payments to pensioners. The funded part of the pension remains in the account, it can be invested and generate income.

In addition, according to the deputy, the cancellation of auto-subscription is an unambiguously positive step, since the citizen himself must determine acceptable insurance conditions for himself. In turn, non-state pension funds, which were emphasized in the IPC project, are ineffective in the current economic conditions, he argues.

“I believe that the fact of a long-term freezing of a funded pension indicates that the system is junk, degrading, not working and has discredited itself. Initially, when there were other economic conditions, NPFs were fed up with money. Now we see that some non-state pension funds have broken up, while others are waiting for them to pay a funded pension en masse, and they very carefully raise the problem of switching from one non-state pension fund to another with loss of investment income (for citizens. - RT ). Millions of our citizens lost money due to these transitions, ”RT Nilov said.