The authorities figured out where to find «long money» for the economy and relieve themselves of part of the social obligations
From January 1, 2024, a long-term savings program for citizens will start working in Russia. The corresponding bill was signed by President Putin just the day before. The document was created by the joint efforts of the Ministry of Finance and the Central Bank. It was the result of many years of work on reforming the system of pension savings for Russians, which began back in 2016. What are the advantages and disadvantages of the program proposed by the authorities, will it become popular with our citizens, MK understood.
Vladimir R., The 48-year-old manager of a subsidiary of a large state corporation in Perm has long been thinking about saving up a substantial amount for a decent old age. As a result, by now he has managed to be a client of a non-state pension fund (NPF) and a victim of fraud with his pension account.
In 2014, Vladimir entered into an agreement with a pension fund friendly to his state corporation. The manager was warned that, since the state strives to keep money in NPFs for a long time, it is possible to transfer from one such fund to another without loss only once every five years, otherwise all accumulated investment potential will be lost.
The man decided to invest in the NPF an amount of 50 thousand rubles to start with, to look at the effect. Over the next two years, the fund brought him a yield of 10% per annum, and taking into account the capitalization of interest, he earned 10,500 rubles. He liked this result, but then strange events began.
In early 2016, he received a call from another pension fund and was told that he was now their client, although the man did not sign any papers. As he later found out, the transfer was arranged for him by an employee of the bank where he received the card. The man had to give her a passport for scanning, inside the cover of which was SNILS. The operator, apparently, made copies of both documents and reported to the fund with which her bank had a partnership: look, she brought you a new client, give me my percentage of the transaction.
The man tried to find out how it was possible to put his signature on the document: whether it was an outright fake or in a pile of papers for opening a bank card they slipped him another one — about moving to a new NPF. But this was not possible.
The victim began to study the issue and realized that cases of fraud in this area are not uncommon, because both documents are asked to be scanned in a variety of places — from the personnel department to the MFC. There were precedents when agents of such funds presented themselves as recruitment managers, conducted interviews with candidates and, under this pretext, lured out the necessary documents and signature samples, after which they frankly forged the necessary papers.
Unable to prove the fact of fraud and resigned to the loss of part of the money, the man tried to take the main amount, that is, his 50 thousand rubles, from the new NPF. But Vladimir never saw his money. In mid-March 2016, the license of this NPF was revoked. There was a major scandal in Perm: deceived pensioners stormed the organization's office, representatives of the Bank of Russia arrived in the city, and the director of the fund was arrested in his cottage with the help of security forces. He was accused of fraud: he transferred 1.7 million rubles to a controlled LLC under the guise of paying off the debt of his NPF, but in fact, as the investigation established, the money was spent for purposes not related to the activities of the pension fund.
After this story, Vladimir is extremely skeptical about all funds and pension programs, both public and private. And now he saves for retirement by buying shares and converting money into foreign currency.
Back in 2002, a pension system based on the accumulative principle was launched in Russia on a large informational scale. “Citizens formed their pension capital through mandatory pension insurance,” explains independent financial adviser Natalia Timoshkina. Since 2010, incoming contributions have been divided into two parts. The first of them was 16% of the wage fund — it was sent to the budget of the Pension Fund of Russia (PFR, now part of the Social Fund of Russia, SFR. — Auth.) To pay current pensions. Due to the second part — it was 6% — individual pension savings were formed, which are kept in an account in a state or non-state pension fund and invested in order to ensure capital growth and receive a pension in the future.
The leaders of the economic bloc assigned hope that citizens will become co-investors in their future pension. They will massively transfer their savings to non-state pension funds and management companies, which will manage them so well that these savings will increase all the time.
Thanks to this, the state will receive the long-awaited «long money» — funds for the implementation of long-term investment projects. The country's economy will grow and develop all the time. Well, on the accounts of citizens participating in this program, serious profits will accumulate. It, of course, will exceed the official inflation rate, and all this happiness will last for years. As a result, NPF clients will secure high pensions for themselves by old age, will travel to foreign resorts and look down on the «silent people» who did not believe in this government initiative.
However, all these good intentions were shattered by the harsh Russian reality. Citizens did not see obvious reasons to massively switch to such funds. Some of these funds were quickly found to be fraudulent. And those who worked honestly faced all the difficulties of the Russian economy, which periodically experiences crises, and even did not always make a profit.
For example, in 2021, fund clients received an average return of 5.2%, which was higher than the inflation rate for the year (4.9%), but clearly not enough to dream of a comfortable old age. Well, last year the profitability of all NPFs turned out to be completely below inflation (in 2022 it was almost 12%) as a result of the influence of geopolitical factors.
“It is not entirely correct to say that the NPF system has not yielded results,” says Dmitry Khmelev, head of the Banki.ru analytical center. — Nevertheless, the number of participants who form a non-state pension on their own under individual pension plans in NPFs exceeds 6.2 million people.
Most of them form a corporate pension in NPFs with the help of employers, while 1.5 million participants pension assets are already receiving pensions.”
Pension assets accumulated in NPFs are approaching 5 trillion rubles, and the ratio of these funds to GDP, taking into account also accumulated pension savings in the PFR (2.3 trillion rubles), exceeds 4.5% to GDP. These funds are invested in the country's economy and bring additional income to citizens.
The average account of participants in non-state pension programs as of the end of the first quarter of 2023 is 233 thousand rubles. However, for pension systems, these are not the biggest indicators. For comparison, in countries with developed pension systems (USA, the Netherlands, Denmark), this figure exceeds 100%, and sometimes even 200%, the analyst emphasized.
NPF investments in the real sector also turned out to be zilch. Having lost a lot of money in the crisis of 2008, then in the difficult 2011 and 2014, they stopped burning with the desire to get involved with the long-suffering real sector of the Russian economy, preferring to make money in bonds.
In parallel, the state itself began to strike at the system created with such pomp. In 2013, the government decided to introduce a moratorium on the transfer of insurance contributions to the funded part of the pension due to the PFR budget deficit. “This happened due to an increase in the life expectancy of the population and an increase in the number of pensioners, therefore, since 2014, mandatory contributions have been transferred to the payment of current pensions,” Timoshkina believes.
The freezing of the funded part of the pension has been extended until the end of next year. Unfortunately, when launching the new program, neither the Central Bank nor the Ministry of Finance explained what would happen to the frozen pension savings after 2024. This is probably why the word “pension” has disappeared from the name of the new program, which starts on January 1. Now the Central Bank of the Russian Federation quite abstractly says that «long-term savings will help to save in order to receive additional income in the future or create an airbag in case of special life situations.»
At the same time, unresolved issues in the Russian economy have not gone away. “The growth in the number of pensioners in the presence of demographic problems has long been pushing the state to partially relieve itself of the burden of pension payments,” says Anastasia Khrustaleva, Senior Vice President of IC Fontvielle. Our country still needs “long money”, which has been repeatedly stated from high tribunes. According to the Associate Professor of the Department of State and Municipal Finance of the PRUE. Plekhanova Meri Valishvili, in fact, the implementation of the new long-term savings program (LTS) is planned as a kind of restart of the NPF system. The expert assesses its potential as quite significant. 70 million Russians have pension savings, more than 36 million people are insured in the NPF, and only 6 million people actively use various investment instruments to accumulate future pensions.
The essence of the bill on PDS signed by the president is that now the Russians will pay voluntary contributions, and the program operators, NPFs, will invest them, ensuring the return on investment. You can direct citizens' funds to these funds into low-risk instruments under the supervision of the Bank of Russia.
After 15 years — this is the minimum period for concluding an agreement — citizens who have become participants in the program will be able to use the money along with the profits accumulated during this time from them. For comparison, in banks now the maximum deposit term is 3 years.
At the same time, the law provides for a situation where money can be taken earlier, for example, in case of a serious illness to pay for medical services, as well as in case of loss of a breadwinner. In addition, before the expiration of the 15-year period, program participants (and they can be all adult citizens of the country) will be able to start receiving payments if they reach 55 years of age for women and 60 years for men. These are the pre-reform boundaries of the retirement age that existed until 2019.
The main advantage of the program, as conceived by its developers, is the obligation of the state to co-finance the savings of Russians. The savings of program participants will be increased by transfers from the National Welfare Fund (NWF) and SFR reserves. The maximum amount of state participation is 36 thousand rubles a year. Only those citizens who will make annual contributions under a long-term savings agreement in the amount of at least 2,000 rubles can apply for state support.
According to Irina Andrievskaya, director of content and analytics for the Vyberu.ru financial marketplace, The co-financing mechanism is based on the principle of social justice. The less a person earns, the more money he will receive as co-financing from the state. The analyst gives specific calculations:
— If your average monthly income is less than 80 thousand rubles, the state will add 1 ruble for every deposit you make. Let's say you contribute 36 thousand rubles a year, then the state will double the amount.
— If your average monthly income is from 80 thousand to 150 thousand rubles, then the state will add 1 ruble for every 2 rubles you deposit. To get the maximum 36 thousand rubles, you need to deposit 72 thousand rubles.
— For people with an average monthly income above 150 thousand rubles, the state will add 1 ruble for every 4 rubles contributed. To get the maximum amount of co-financing, you need to deposit 144 thousand rubles.
It turns out that people with a salary of up to 80 thousand rubles in the first three years will receive a 100% return, and this is without taking into account the tax deduction and interest from investments of the selected NPF.
On the one hand, it looks attractive. After all, no deposit in the bank brings such interest. But in the next 12 years there will be no such profitability. True, the government reserved the right to extend the terms of co-financing. Apparently, the authorities already understand that it will not be easy to breathe “life” into the PDS.
The bill also provides for additional incentives for program participants:
— Annual tax deduction for contributions up to 400 thousand rubles a year, the return to hand is up to 52 thousand rubles.
— Increased fund insurance limit: the deposited money of Russians will be insured in the amount of 2.8 million rubles.
— On an individual basis, with NPFs, it will be possible to fix the period of regularity of payments (after the accumulation stage or a one-time transfer after the end of the program).
This system seems interesting for citizens who are actively working and do not want to invest. The authorities are doing a lot to motivate Russians to act rationally and save some of today's income for the future, but the proposed approach has drawbacks.
As Natalia Milchakova, a leading analyst at Freedom Finance Global, points out, the main disadvantage of the program is that the state does not guarantee a return on these investments. And in this context, it is easier for a future pensioner to save money himself in a reliable bank, understanding at least what return on investments he will receive in accordance with the contract. In addition, long-term savings assumes that the national currency and interest rates in the country are quite stable and do not change dramatically over time. And this is clearly not our case!
It is far from a fact that investments in NPFs, which are now earning on the Russian stock market, will bring investors a stable income. So, in 2022, due to the crisis, the Moscow Exchange index almost halved. The financial result of any NPF is determined by market conditions and the professionalism of management. But an ordinary investor, giving his money to management, cannot influence either the first or the second.
Another important obstacle to the implementation of this system is the low income level of the population and its high debt load. As Khmelev recalled, 46 million people in the country have loans, the obligations of Russians to banks exceeded 30 trillion rubles, that is, people borrow money from financial institutions to meet their needs. Under such conditions, most Russians are simply not up to long-term savings: they would have to make ends meet here and now.
Well, of course, everyone is confused by the long term of the program. “We are offered to wait for 15 whole years, and someone today can guess what will happen during this time? — asks rhetorically the head of the department of statistics of the State University of Management Nikolai Kuznetsov. “Unfortunately, our government has done everything to undermine citizens' confidence in the pension system as much as possible. Who among us today is ready to believe the promises and oaths that this will never happen again.”
Under these conditions, the attempt to attract citizens to participate in the new program resembles the desire of the fox Alice and the cat Basilio to lure Pinocchio to the Field of Miracles, but the majority of the population are adults, with experience (including bitter), and how this attempt of a wooden hero from a fairy tale ended is well remembered.