Pension fund - what is it? Main functions and principles of operation

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Alas, but in this mortal world there are many processes that are not yet subject to man. And one of them is aging. To alleviate the inconvenience, quite a few different schemes were invented, one of which is a pension. But what organization is responsible for ensuring that when the time comes, a person receives material assistance? The pension fund is a financial body created specifically for these purposes. Foundations are public or private, but each performs a set of important functions in society.

What is a pension fund? Is he managing all the consolidated funds?

Initially, we should decide what we are dealing with now. A pension fund is an organization that provides socially significant services to the population of a certain state (or countries). When a person reaches a certain age, he is en titled to appropriate payments, and it is the fund that makes them. Simply put, the Pension Fund manages the funds of the pension system (all or part, depending on the state). Specifically, in our case, the fund guarantees the fulfillment of the rights of citizens of the Russian Federation to receive appropriate payments.

Pension funds and legislation

This organization was established in accordance with the Decree of the Supreme Council of the RSFSR No. 442-1 "On the organization of the Pension Fund of the RSFSR". At the moment, its budget is approved by the State Duma of the Federal Assembly by a separate law during the adoption of the main financial document of the Russian Federation. At the moment, there are more than 40 million pensioners in the country and 20,000,000 beneficiaries who receive payments from it (despite the fact that a total of 128 million citizens live in the Russian Federation). As you can see, at the moment the Russian Pension Fund is experiencing significant pressures.

Social features

An important reason why the Pension Fund of the Russian Federation exists is the fulfillment of social functions by it. Among such obligations that this organization fulfills are:

1. Assignment of pensions to citizens, based on their length of service and working conditions, with the subsequent payment of the corresponding amounts.
2. The Russian Pension Fund takes into account insurance funds that come from compulsory pension insurance.
3. Social benefits are assigned and implemented for certain categories of citizens: the disabled, veterans, people awarded high awards.
4. Recording of all participants who are members of the mandatory pension insurance system.
5. Working and interacting with employers who pay insurance premiums. In particular, the Pension Fund of Russia is engaged in the collection of arrears. Consequently, some law enforcement functions are assigned to him.
6. Russian Pension Fundis engaged in the payment of funds that are issued as maternity capital.
7. Manages all funds available to the country's pension system.
8. Implementing a program of state co-financing of voluntary savings. It is also known as the Thousand per Thousand initiative of the Russian Federation.
9. Administers insurance funds that come from compulsory pension and medical insurance.
10. The Russian Pension Fund establishes federal social bonuses to bring total income to the subsistence level.

State Pension Fund

In this case, the Pension Fund of Russia will be considered. Conventionally, the mechanism of this provision can be formulated as follows: the current generation of able-bodied citizens works and receives material benefits. Some of them are transferred to modern pensioners, who receive maintenance from the state for their past work. When the working-age generation gets older and older young people take their place, this scheme will operate as before, only with other participants. And those who previously filled the Pension Fund of Russia will be paid security. This is a cyclic change. The negative side of this order is the gradual decrease in the purchasing power of pensions, which is due to a number of reasons. Therefore, in the absence of additional sources of income, old age can be a very unpleasant part of life. Indeed, in most cases, the amountpaid by the Pension Fund of Russia, not much different from the subsistence level.

You should also mark the difference in the hierarchy. So, after the national level of organization, the next is the Pension Fund of the region. He deals with the study of all issues that arise in this administrative unit. The District Pension Fund, in turn, collects information.

Private pension funds

The main problem, namely the impoverishment of pensioners, is often proposed to be solved with the help of private pension funds. They are the owners of funds that can be mobilized. Thus, PPFs operate on the principle of investment funds: citizens give them money, managing organizations decide where to invest it, and pay pensions for people from the interest received. Thus, money does not lose its purchasing power by increasing its mass. But such a good and attractive scheme has its drawbacks.

This type of pension provision is popular in the United States of America, so the features of the system will be described using the example of this particular country. So, a rather problematic point is the issue of honesty and the return of funds when the CPF is ruined. Another problem is that they operate in a market economy, where it is impossible to guarantee that everything will work out as intended. Therefore, money can be lost (in most cases, a fixed percentage is charged, but even this does not help if a private pension fund goes bankrupt). Such negativeThe Russian Pension Fund has no moments, but it has its drawbacks.

Importance in society

As you can see, these organizations are important so that people can feel supported in time when they themselves cannot fully take care of themselves. Often the Pension Fund of the Russian Federation actively interacts with social services. It is also worth noting that the practice of monthly payments, although partially, makes it possible to free children from the need to provide financial assistance to their parents. Therefore, the Pension Fund of the Russian Federation is important in terms of increasing the effectiveness of social institutions.

Contributions as the main source of income

The main source of replenishment of funds available to the Pension Fund of the Russian Federation are contributions received from existing employers. The standard rate is 22%, which is taken from the wage fund. Since 2009, it has become possible to make voluntary contributions that go to the funded part of the pension. It stipulates that the pension is calculated by both the state and the employer in equal amounts (the state has a restriction for this rule - the amount of the payment must be at least 2 thousand rubles and not more than 12). This option is beneficial for each of the participants in these relationships. So, the employer receives a tax deduction from the amount of earnings in the amount of up to 12 thousand rubles. Also, part of the obligations that the Russian Pension Fund has was transferred to the National We alth Fund.

Conclusion

HowYou see, a pension fund is not difficult, and this organization is very easy to understand. In conclusion, it is important to have timely contributions to keep the whole system afloat. Also important is the presence of white wages (which is not affected by the contribution to the state budget). After all, the Russian Pension Fund works for the benefit of any citizen of the Russian Federation.