04 October 2016, 11:09 / Economics

Klepach: The proposals of the Ministry of Finance and the Central Bank on pension reform are better suited to the rich

The reform of the pension system proposed by the Ministry of Finance and the Bank of Russia with the preservation of the funded part is “for now a model for wealthy people who have high incomes and can save these funds within the framework of the pension system.” This was told to TASS by Andrey Klepach, Deputy Chairman and Chief Analyst of VEB. He believes that the savings system is a very important resource for the country’s financial system, especially for private pension funds, and for lending public debt. “Therefore, a search for some kind of model is necessary. From what has been stated, it is assumed that this is still a voluntary-compulsory system. People will be required to save, but the regions will essentially pay for this. The financial situation is quite complicated, so other solutions are needed,” says Klepach.

On September 23, the Central Bank and the Ministry of Finance presented proposals for modernizing the pension savings system - the concept of “individual pension capital” (IPC). It assumes that individual pension capital will be formed in non-state pension funds through voluntary contributions from citizens, and the amount of contributions will not be limited. The contributions paid by the employee will be supplemented by the state through tax deductions and deductions from social contributions, and these funds will be credited to the IPC account automatically. Employers will be able to participate in co-financing, receiving certain benefits in this case. Citizens who have pension savings under compulsory pension insurance will be able to transfer them as a contribution to the IPC account. It is planned that for working citizens who did not express their opinion on participation in the system during the transition period, individual pension capital will be formed automatically. At the same time, it will be possible to suspend the payment of contributions at any time. Thus, the accumulation strategy will be determined directly by the citizen himself. All IPC funds will be the property of the citizen; in certain cases, they can be used before retirement.

Previously on the topic: Golodets: the country’s financial system is not ready for pension reform Previously on the topic: Do you want a pension? Save up yourself Previously on the topic: Russians will be offered an alternative pension