2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16
Recently, the question of what it means to "freeze" the funded part of the pension has become relevant? As part of the article, the answer to it will be analyzed, and a forecast will be given of what to expect in the near future.
General information
In the Russian Federation, the pension system is based on two main components: insurance and funded parts. We inherited the first one from the time of the Soviet Union. The second component has been put into operation since 2002, when the pension reform was launched. What prompted this strategy?
In the Soviet Union, there was a relatively low life expectancy (compared to today). At the same time, there were quite a lot of children in the families, which is why the number of the working generation exceeded the number of pensioners. With current trends, this no longer brings the past effect. Therefore, it was decided to do the following: working citizens pay contributions to the pension fund. All money goes to pensioners.
Given that the aging process continues and the number of employeesdecreases, there are not enough funds to make payments. Partially, this problem was solved thanks to budget transfers, but in the face of falling profitability of export items, there is not enough money.
What was it decided to do?
The meaning of the pension reform was to gradually move to the funded system. In such cases, payments for old age will not depend on the state, but on the employee. And who is en titled to the funded part of the pension? Anyone who has a desire to issue it and was born after 1967. But as soon as the funded part of the pension of retirees (both past and future) became a solid amount, the government succumbed to the temptation to use these funds to solve existing problems.
And now we come to the part that most people are interested in. We will now understand what it means to "freeze" the funded part of the pension. It was first announced in 2013. Then the growth of the Russian economy began to slow down. The ruble has entered the stage of devaluation. The decision to transfer the funded part of the pension to state administration helped the government find an additional 243 billion rubles in 2014, albeit at such a price.
Continue to use this mechanism
In the fall of 2014, they decided to extend the moratorium on freezing pension savings for 2015 as well. This maneuver made it possible to receive 307.4 billion rubles. Thus, the beginning of the seizure, in the truest sense of the word, was laid.money set aside for the future. Why exactly this wording, we will now figure it out.
The funded part of the pension in the NPF and in the State Pension Fund is used to cover current expenses at the expense of payments in the future. Of course, compensation is provided for on paper, but how it will be implemented is a big question. One can cite the words of Nikolai Platoshkin, a professor at the Moscow University for the Humanities, that the pension reform has failed. Something similar could be observed before, when the responsibility for the future of people was literally shifted to them.
Why did this happen?
So, now we know what it means to "freeze" the funded part of the pension. Let's look at the reasons for this situation. If we quote the words of the same Platoshkin, then he believes that the root of this situation lies in the following:
- Employers did not pay additional funds to the Pension Fund of the Russian Federation.
- The state, instead of tightening the requirements for business responsibility to balance the planned and real budget, decided to confiscate people's savings.
Moreover, Platoshkin believes that raising the retirement age is only a matter of time. After all, problems remain unresolved, while the country constantly faces new challenges.
Is everything so bad?
Let's look at everything critically. At one time, Deputy Prime Minister Olga Golodets said that due tointroduction of a moratorium on the formation of savings, none of the citizens of the Russian Federation will suffer. All the funds that are now taken by the state are credited to people's accounts, and pension capital will be formed on the basis of them. The only difference is that it will be carried out through the insurance system. She is echoed by the head of the FIU. But here are a few facts that are alarming:
- Initially, the freeze was planned exclusively for 2014.
- In reality, it has now been extended until 2019.
- A funded pension is essentially an investment capital. And its withdrawal does not contribute to the acceleration of economic growth.
This, however, could be understood by reading the scenarios of the macroeconomic forecast provided by the Ministry of Economic Development.
What is better: specifics and features
The insurance part is growing solely due to indexation, which is carried out by the government. Savings increases due to investment income. It is problematic now to say exactly which option will allow you to get more profit in 30-40 years. But the funded part has serious advantages.
To begin with, it should be noted that it can be inherited. In addition, a lump sum payment from the funded part of the pension may be requested. True, there must be good reasons for this. A lump sum payment from the funded part of the pension may be issued upon the death of the person for whom it was collected, or in the event of a serious illness. But for this it will be necessaryrun around with papers, it is possible that according to the courts. Also, if you have two points of support, then this reduces the likelihood of a negative situation, and when it appears, you can minimize losses.
Conclusion
So we figured out what it means to “freeze” the funded part of the pension. Finally, I would like to give a little advice. You should not focus solely on an organization such as a pension fund. The funded part of the pension is, in fact, a very specific investment portfolio. You can send this money to the concentration of a separate package of securities that is not controlled (in that sense of the word) by the state. And you can do it differently - invest all available funds in children. After all, properly educated children are also a kind of investment, which, moreover, will be more reliable than state support.
Do not forget also that now (so far) there are various programs like maternity capital. And while there is an opportunity, it must be used. After all, no one can take care of us better than ourselves. It is necessary to remember this truly golden rule. And the pension that is awarded by the state… Well, if there is one, then it can be considered a good addition in old age, which will make the last years on this earth more or less pleasant.
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