Medvedev announced the preservation of funded pension – BBC Russian

• 23 April 2015

Post

funded pension – is 6% of the total amount of deductions from the salary of the employee

Russian authorities decided to maintain the mandatory funded pension part, Prime Minister Dmitry Medvedev at a meeting of the government.

He said that “the decision is supported by most experts and most importantly the citizens of our country” . Ministry of Finance and Economic Development Ministry has instructed to balance the budget.

According to him, pension funds should be a source of long investment for the economy based on private foreign markets.

The meeting was held on this issue in the Cabinet the day before – then Labour Minister Maxim Topilin said that a formal decision will be known April 23.

In 2014, the Russian government has introduced a moratorium on the funded part of pensions, all pension contributions for that year have been listed in the insurance part. Later the moratorium was extended in 2015.

Supporters and opponents

Ministry of Economy and the Ministry of Finance in favor of retaining the storage component in the system of mandatory pension insurance. One of the arguments of representatives of the economic bloc in favor of maintaining the mandatory funded pension is their effect on the economy as investment resources.

The head of the Bank of Russia Nabiullina believes that the system of mandatory pension savings is critical for long-term investment.

The social unit of the government headed by the Deputy Prime Minister Olga Golodets, by contrast, stands for the transition to a fully PAYG pension system.

In this case, the opponents and supporters of the non-mandatory funded pension claim the need to take this year a decision in principle about it.

According to the existing scheme of today the total amount of contributions to the Pension Fund is 22% of the salary of the employee. 16% of them are part of a joint and several, and are used to pay benefits to current retirees. In addition, the sum of these contributions affects the amount of pension that will receive the employee.

The remaining 6% form the funded part, they are not spent on current payments and invested and need to create an income that will complement future retirement worker.