Which pension fund to choose - state or non-state? Transition to a private pension fund

Currently, conscious citizens have a dilemma: which is better - a state or non - state pension fund? Which one to choose? Those and others are incredibly popular, they are written about in newspapers, shown in television programs, and talked on the radio. Each individual citizen must decide for himself which pension fund to choose - state or non-state. The decision must be balanced and informed. And this contributes to a clear understanding of what this and that organization is.

State Pension Fund

The reform of the 2002 pension system led many to bewilderment. And even at present, the question of which pension fund to choose - state or non-state - is still open to many. Some citizens nevertheless decided not to change the management company and leave their savings unchanged. At this stage of economic development, according to many political scientists, any citizen who has entrusted his savings to a state pension fund can be left without them. This is due to higher inflation in relation to interest accrual for each past year. All pension savings are held by Vnesheconombank. This financial institution is not responsible for pension contributions of citizens in the event of any losses. Many, under the pressure of this very opinion, made the transition to a non-state pension fund. Some even transferred their savings to several organizations. Indeed, according to pension legislation, a citizen has the right to change the managing organization once a year.

But, despite this fact, not a single person on the planet will be able to give absolute guarantees that in a few decades this or that non-governmental pension institution will be able to pay the due amount to its clients.

Guarantees of the state management organization

In turn, the RF PF is entrusted with the implementation of several important functions at once, namely:

• keeps track of the arrival of all insurance premiums;
• determines the monetary equivalent of retirement benefits for each individual citizen;
• in the presence of any special circumstances, assigns the payment of social benefits;
• maintains close relations with employers;
• Issues certificates for maternity capital;
• is a member of state. co-financing programs, etc.

What is the essence of the reform?

Based on the foregoing, it can be concluded that non-state pension funds were created in order to facilitate the work of the state pension fund, namely, to minimize their costs and narrow the range of obligations to citizens. This sensible tactical move made it possible to resort to a more rational distribution of funds between management companies, and also increased the percentage of profit in comparison with Vnesheconombank. In this case, which pension fund to choose - state or non-state? We will deal with the second option.

Non-Governmental Organization

The number of these institutions at this stage tends to infinity. If a citizen has definitely decided to change the management organization, the question arises before him: how to choose a non-state pension fund?

First of all, you need to get acquainted with the rating of managing organizations. He will certainly help to make a choice.

The rating of the best non-state pension funds by profitability (the size of the future pension depends on it) is presented in the table.

Tasks of private pension funds

Such institutions were created in order to make a profit for their organization and increase the monetary accumulations of the fund participants at the expense of the annual interest rate. In turn, such pension funds receive profits, acting as investors for accredited management companies by investing money in securities. This maneuver guarantees a higher rate of return on the client and provides many times more level of reliability of the enterprise.

Guarantees of non-state pension institutions

Provided that the fund incurs losses, compensation and payment of dividends to customers is carried out at the expense of the authorized capital. And Vnesheconombank evenly distributes losses among all depositors. And the interest rate of participants in a non-governmental pension institution significantly exceeds the inflation level of the country. This, in turn, guarantees a decent pension upon reaching retirement age. Therefore, if a citizen still has a question about which fund is better: state or non-state, this fact should be taken into account. There is another advantage of these institutions. Subject to the bankruptcy of the non-state pension fund, all clients' funds are returned to the state pension institution. We can conclude that the client will never lose anything.

It should also be noted that until the client reaches retirement age, the amount of his pension may vary in one direction or another. Consequently, cash can be received in the form of a one-time payment or make monthly payments. If the client suddenly dies, then the next of kin are entitled to receive the funds remaining in the client’s account. This fact distinguishes a non-governmental pension institution from a state one, which simply does not authorize such an action.

Transition to a private pension fund

When a person has realized all the advantages of non-governmental pension institutions and decided to become their client, he needs to follow this algorithm of actions:

1. Decide on the choice of a company specializing in compulsory pension insurance.
2. Check the legality of the actions of this organization, namely: compliance with the requirements of the law, the availability of a license and registration with the Central Bank.
3. To pay a visit to this non-governmental institution in order to conclude an agreement.
4. Carefully study this contract, immediately find out all the issues of interest to the client.
   

The contract should include the following clauses:

• name of institution, surname, name, patronymic;
• calculation of accumulative resources, investment conditions, accrual and direct payment;
• number of insurance certificate, date and place of birth of the client, his gender;
• client and fund responsibilities;
• reasons for receiving a pension with accumulation of funds;
• order, terms of payments (one-time, urgent);
• algorithm for pension delivery with savings and payment terms for the delivery itself;
• client and fund liability in case of violation of obligations;
• algorithm for terminating an existing contract;
• conditions and procedure for resolving disputes;
• customer and bank details.

Only with the above items, is this transition document valid.

Only with the most serious and responsible approach to the question of how to choose a non-state pension fund can we secure a comfortable and happy old age.

Conclusion

Based on the foregoing, one can easily answer the question of which pension fund to choose - state or non-state. The answer is obvious - the second option. After all, non-state pension funds have a lot of advantages over state. But it is necessary to take into account the legislative changes taking place in the country, so as not to get into a mess and be able to derive maximum benefit.