The expert named five reasons why this strategy is doomed to failure
The long-term savings program will start in Russia from the beginning of 2024, but so far does not look attractive in the eyes of most citizens. Additional measures are needed to increase its popularity. This was stated by the first deputy chairman of the Bank of Russia Vladimir Chistyukhin. At the same time, the Ministry of Finance hopes to attract 2 million people to participate in the program. What the authorities will need to achieve these goals, “MK” found out from experts.
The main advantage of the long-term savings program, as conceived by its creators, 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 and the reserves of the Social Fund. The maximum amount of state participation is 36 thousand rubles a year. Only those citizens who will make annual contributions under the program in the amount of at least 2 thousand rubles will be able to apply for state support. The term of the contract is at least 15 years, and it can be concluded any number of times. The amount of insurance for investments under the program is twice as high as for bank deposits – 2.8 million rubles.
Russian President Vladimir Putin signed a decree on launching a long-term savings program in July this year. Participation in it will not be mandatory: citizens themselves enter into an agreement with a non-state pension fund (NPF). The Ministry of Finance hopes to attract 2 million people to participate in the program and accumulate up to 300 billion rubles of additional resources within its framework. At the same time, Vladimir Chistyukhin acknowledged that so far the long-term savings program is not attractive to the majority of compatriots. He suggested “gentle nudge” potential participants, such as promising to protect the interests of workers in enterprises. Or organize the process in such a way that pension funds or banks, which will be agents of the system, begin to offer super-attractive conditions. The first deputy chairman of the Central Bank admitted that there is still not enough motivation. According to him, when the system starts working, it will have to be fine-tuned in the interests of investors, and not wait for the first results.
Experts are also skeptical about the prospects of the new system, but they see the roots of its unpopularity much deeper. In order for people to give away their savings for a period of decades, favorable conditions for their placement alone are not enough, because trust in the actions of monetary authorities has long been undermined. In addition, it is not clear how it is possible to offer something super-profitable in the current economic and geopolitical environment. “In order for the population to be gently pushed towards long-term savings, several factors must come together,” says Alexander Safonov, professor at the Financial University under the Government of the Russian Federation. – The most important of them is that people should have free money that they can invest in order to provide themselves with a relatively comfortable old age. Without this condition, all other actions on the part of the state will not matter. The second important factor is the existence of a stable and predictable financial system. Even if the Russians have funds, they will invest them somewhere only if they see that the money they have collected will not turn into dust in 10-15 years. And for this it is necessary to regulate the level of inflation: it must be lower than the interest that citizens will earn on their investments. “Over the past 10 years, inflation in our country has amounted to 100%,” says investment adviser Yulia Kuznetsova. “This means that the funds lost the purchase price by 2 times.”
The third necessary factor, according to Safonov, is the presence on the market of stable financial assets that have a predictable increase in profitability. “Unfortunately, we often encountered a situation where state-owned companies and blue-chip corporations did not pay dividends for various reasons,” the professor said. “There are risks that people will not be able to get a return on securities higher than the inflation they expect.”
The fourth factor is the confidence of citizens in the pension system. To do this, the state first of all needs to stop all sorts of experiments in this area. To make people understand that nothing will change in 30-40 years. “Citizens have already seen the problems associated with pension funds, so trust in the actions of the authorities in the pension sector is at a low level,” Kuznetsova echoes her colleague.
The fifth factor is the benefits that the state can establish in the field of taxation. For example, those funds that a citizen has set aside for his pension provision are automatically exempt from income tax in full. In this case, a person receives an increase of another 13% per annum.
In addition, information work is also important. It is necessary to tell the population what benefits the participation in pension co-financing brings to citizens. “It’s impossible to come up with anything new here: everything was created before us,” continues Safonov. “The right to withdraw funds for expensive treatment from the system of long-term savings or the ability to pay off bankruptcy debts with them – all this already exists in the world and is actively used.”
Alas, most of the factors named by the expert do not work in modern Russia , which means that there is no need to hope for a successful “push” of Russians to long-term savings. As for statements that the Ministry of Finance expects to attract about 2 million citizens to the system, this most likely corresponds to the number of people who are now participants in the funded pension system. It’s just that their savings products will be transformed into new ones.
“It should be understood that at the level of the key rate set by the Bank of Russia, the vast majority of enterprises will not be able to receive any excess profits, so hope that people will have some free funds that they will direct to long-term investments is impossible, ”safonov concluded.