The pension system in the Russian Federation is designed in such a way that citizens decide independently where to direct their savings: to the formation of the insurance or funded part of payments. All people had a choice until 2016. For two consecutive years, the opportunity to distribute savings has been suspended. All Russians payroll deductions (22%) form the insurance part of the pension. Therefore, the question remains, which pension fund to choose to perform these tasks: public or private?
How is a pension formed?
Before deciding which pension fund to choose, we will examine in detail the structure of the pension. This social payment consists of the main, funded and insurance parts. The first is set in a fixed amount and clearly prescribed by law. The insurance and funded parts depend on the results of human activities. The employer monthly deducts 22% of the contributions for each employee, of which 16% goes to the formation of the insurance part, and 6% to the funded part.
Most of it is directed to payments to current retirees and is taken into account in the form of state obligations to a particular citizen. The accumulative part is deposited on the individual account of the insured person. It is these savings that can be correctly managed. So that the savings do not depreciate by the time a person retires, they should be invested. Each citizen himself decides who to trust this process: public or private PF.
How to get a big payout? To do this, you need to participate in the formation of capital. In addition to the compulsory insurance program, you can also participate in the co-financing program and form an additional pension. To do this, you need to know which non-state pension fund to choose. Reviews, ratings, working conditions, additional maintenance services - all these indicators affect the choice of a particular organization.
Savings Changes
Since 2014, the funded part of the pension has been reduced to 2%. This greatly affected the size of future payments. Those who wished to keep their savings back in 2013 began to search for private pension funds. There were many people who wanted to regulate the amount of their retirement savings. The insurance part of the payment, which is formed in the Pension Fund, is indexed by the percentage of inflation, and the funded part by the rate of return of the management company or non-state pension fund. Therefore, the question of which private pension fund is better to choose is so urgent.
NPF
Non-governmental PF is a non-profit organization that was created for the pension provision of Russians. Its activities are regulated by law. NPF and PFR can act as an insurer of a citizen in terms of the funded component. When a person reaches retirement age, the fund begins to pay pensions calculated on the basis of the amount of savings formed on a separate account. NPF concludes agreements with each client.
Why bother to consider which non-governmental pension fund is better to choose if all the same functions are performed by the FIU? Non-state pension fund distributes only the funded part of the pension. Just as each person has to decide where to buy an insurance policy or compulsory medical insurance, Russians are free to choose an organization that will manage the distribution of their savings.
The risks
The activities of each NPF are regulated by federal laws and independent companies. The activity is controlled by the Federal Service for a specific financial market, and the depository is engaged in the allocation of funds. However, it is important to know which pension fund to choose. User reviews can be quite subjective. It is necessary to additionally find information on a specific organization.
Ratings
Which pension fund is better to choose is one of the frequently asked questions. To answer it, you should familiarize yourself with the rating of NPFs from the Expert RA agency. It presents an objective assessment of most organizations operating in the Russian Federation based on indicators of profitability and reliability.
An expert assessment of the activities of the fund is a paid service. Therefore, if an organization is not in the rating presented, this does not mean that it is no longer active in the domestic market. Nevertheless, doubts arise as to why the fund is not ready to disclose information about its level of profitability. Therefore, it is not advisable to work with such organizations. However, even large funds may have financial problems. If the selected NPF is liquidated, all accumulated funds will be transferred to the FIU within three months.
Rating is a comparative scale of organization profitability. It takes into account all the performance indicators of the fund in the market. According to the assigned assessments, each citizen can independently choose where to invest. Accordingly, each person makes a decision on the transfer of funds independently.
Selection process
Sooner or later, everyone will face an organization such as a pension fund - which one to choose? The rating is assigned to each by experts of the agency, analyzing about 25 performance indicators on a quarterly and yearly basis. Based on the resulting assessment, NPFs are divided into the following reliability classes:
- “A ++” is an exceptionally high level.
- "A +" is a very high level.
- “A” is a high level.
- “B ++” is an acceptable level.
- “B +” is a sufficient level.
- “B” is a satisfactory level.
There are also the lowest classes "C", "D" and "E". Which pension fund is better to choose? Reviews do not give an objective assessment of the organization’s activities, therefore it is better to focus on non-state pension funds with a rating of at least “A”.
How to transfer to another fund?
If the final decision on which pension fund to choose (public or private) has already been made, then you need to study in detail the issue of documenting the operation. In order to transfer the savings, it is necessary to conclude a compulsory insurance contract with the selected organization and submit a corresponding application to the FIU. Each citizen can change the decision regarding the insurer no more than once a year. If the question of changing the pension fund was raised for the first time in several years, then first you need to find out exactly where the citizen's savings are. This information can be obtained from the local FIU branch.
How to find out the account balance?
Every year before September 1, each NPF must send information to the insured person on the status of his pension account, on the results of investment savings. Similar reports are sent by the state pension fund regarding pension savings. If the notification did not arrive by mail, it can be received free of charge at any territorial administration of the RF PF in the form of an extract from a personal account. To do this, you need to provide an application, insurance certificate and passport.
How to control accumulation?
We need to seriously approach the question of which pension fund to choose. Customer reviews of the organization may vary significantly. Therefore, in addition to the rating, you also need to analyze the services that a particular FIU provides.
As mentioned earlier, each fund must annually send information on pension savings to all insured persons. Some NPFs organize access to the “My Account” on their website for clients. Here you can find out the balance on the account and information about all transactions.
How are savings paid?
By law, several payment options are allowed. Pension can be paid for life, in the form of an urgent or lump sum payment. In the second case, we are talking about funds that have been accumulated as part of a co-financing program or from maternity capital. A lump-sum payment is due if the pension is 5% or less in relation to the total amount of the labor pension. All payments made by NPFs and PFRs are exempt from taxation.
Inheritance
Pension savings funds are transferred to successors in such cases:
- If the citizen who formed the savings died before the appointment of a retirement pension, the accumulated funds will be transferred in full. The legal successors are the citizens specified in the application, or legal successors. In the first case, you can specify any physical. face. In the second case, we are talking about relatives of the 1st (parents, spouses and children) and 2nd (brothers, sisters, grandchildren) queues.
- If a person died after receiving a retirement pension, he received the funded part indefinitely (i.e., he did not allocate funds for the co-financing program as a separate payment), then the successors will not receive any money.
- If a citizen has died after the appointment of an urgent payment, then the heirs have the right to receive the balance of SPV.
In all these cases, payments are not taxed.
Procedure
Before the expiration of 6 months from the date of death of a person, you must submit an application for the payment of the balance of savings to any territorial branch of the PFR. The decision is made within the 7th month after the death of the person, and the payment itself is carried out until the 15th day of the next month. You can receive funds at the post office or by transferring them to a bank account.
Which pension fund to choose?
Pension savings of the “silent people” who left all their savings with the FIU, and in fact the funds are managed by Vnesheconombank, depreciated under the influence of inflation. The total profitability of the bank for 2010–2014. is 44.25%, while the inflation rate has reached 58.65%. NPFs have higher average returns.
Which pension fund to choose? First of all, you need to get acquainted with the list of institutions that have entered the deposit guarantee system. For 2016, it included 32 non-state pension funds. Zero return means that the investment incurred losses during the indicated period. If the NPF works on the principle of repayment, then it compensates for losses from its own reserves.
According to Rusrating, the European Pension Fund turned out to be the most profitable over the past 5 years; it was able to show a yield of 102%. The fund directs its funds into bonds of large Russian companies, for example, First Cargo Company, Magnit, and Europlan leasing company. Its reliability is confirmed by numerous customer reviews.