The difference between the insurance and funded part of the pension is completely incomprehensible to most citizens. However, it exists and is very significant. An interesting fact is that not only elderly people who have retired or are just preparing to do this are interested in this issue, but also the younger generation, concerned about their future. Since this part of the pension allows you to prepare for a pension long before the retirement age, this is a very correct position for young people. However, it should be borne in mind that, despite the possibility of obtaining increased income in old age, there is a rather big risk of getting less or even losing all funds.
Insurance pension
Insurance and funded part of the pension, what is it? That is how most citizens ask the question. Under the insurance part is meant exactly the pension that everyone is used to. That is, it is part of the income that is monthly paid by an employee in order to receive certain payments from a pension fund in old age, which theoretically should be enough for an elderly person to live.
It is formed both from the money that a person transfers throughout his life in the process of work, and from the amounts allocated by the state. At this stage, the pension is calculated using a system of points that are earned by a citizen for his entire career, is indexed taking into account inflation and other factors and paid in a certain amount. This is true for both funded and insurance pensions.
Example of calculating an insurance pension
The formula used to determine the insurance pension is as follows: MF = (KPV * FV) + (KPV * IPK) * SPK. In this formula, SK stands for insurance pension, KPV is the retirement incentive incentive coefficient, EF is the base payment, IPC is the individual coefficient, SEC is the pension coefficient.
What is the difference between the insurance and funded part of the pension? Examples of calculating an insurance pension. A person retires at age 60. The accumulated insurance capital is 12,000 rubles. First of all, the individual coefficient is calculated according to the formula: 12000-3910.34 / 64.1 = 126.2 points. The further calculation looks like this: insurance pension = base payment * bonus coefficient + the sum of all annual PKI * cost of one point * bonus coefficient. Thus, in our case, the insurance part of the pension will be 3910.34 * 1 + 126.2 * 64.1 * 1 = 11999.76 rubles. In this case, fixed payment is understood as insurance, base payment. The funded part of the pension is calculated somewhat differently, more on that later.
The funded part of the pension
Last year, the pension was divided into two parts. One of them was insurance (that is, mandatory, which in any case will be paid), the other funded, which the citizen could manage at his own request. Despite the fact that this has now changed somewhat, the essence remains the same. The funded part is part of the total pension, which consists of both funded and insurance, but you can manage this part yourself by choosing non-government pension funds (NPFs) to manage your own funds that accumulate for old age.
They are formed from the same points as the insurance pension. Citizens are given the opportunity to choose between accruing to them only an insurance pension or both insurance and funded. In the second option, the number of points deducted to the insurance part will be reduced, and they will be transferred to the accumulative.Thanks to this system, a citizen can decide for himself what to do with his future payments: leave everything as it is and get a guaranteed, stable, but small income in old age, or take a chance and try to get much more.
An example of calculating a funded pension
What is the difference between the insurance and funded part of the pension? Examples of calculating the funded pension are different, we give one of them. The man worked for 12 years and every month he received salary 13 000 rubles. First you need to calculate the total size of the savings. This is done simply: the term of work (12 years) is multiplied by the number of months in a year (12) and multiplied by the received wage per month.
After that, it is necessary to take only 22% of the received figure. That is, it turns out 12 * 12 * 13000 * 0.22 = 411840 rubles. Amount received - pension funds. Now, to determine the funded part of the pension, we do the following. To do this, we divide the figure obtained in the previous calculation by the number of months of payment of funds of this type (in 2015 it is 228 months). As a result, we get 411840/228 = 1806.32 rubles - this is the required part due to the pensioner. That is, it will receive it and the mandatory insurance part every month. Perhaps if all the funds were transferred to the insurance part, he would have received more, and maybe much less. This moment can only be calculated directly upon retirement and making the relevant calculations.
Differences
As mentioned above, the insurance and funded part of the pension differ mainly in the fact that the funded part can be independently managed by placing it in non-state pension funds or any other similar organizations. Until 2015, of 22% of income deducted in Pension Fund, 16% went to an insurance pension, and 6% went to a funded pension (at the request of the payer). Since the beginning of this year, insurance and funded pensions have been divided and the entire amount is credited directly to the insurance, while you can choose the option with separation, in which part of the points goes to one pension, and the rest to another. Thus, the question of whether the insurance and funded part of the pension is what, how many percent, is currently not so relevant.
Pros of NPFs
The benefits of using non-state pension funds to manage the funded part of the pension are obvious - income received, which can greatly help in old age. To transfer this type of payments due in old age to the selected NPF, you should contact the pension fund department at the place of registration with the appropriate statement. After that, this part of the funds will become available for managing the specified organization. In fact, risk is what distinguishes the insurance and funded part of a pension. What does it mean? Transferring all funds directly to a pension fund, a citizen does not risk anything, but even in old age he cannot count on increased income. In another case, taking risks, there is a chance to get more profit, but a possible loss of all the funds listed is also present.
Cons NPF
To accurately answer the question: “Insurance and funded part of the pension. What is this? ”, You need to understand that the funded part of the pension is a kind of deposit, which can both bring significant profits and be more unprofitable than the rest of the pension. For example, not all non-state pension funds are the same. Each of them is controlled by different people who use different means (naturally legal) to generate income. Thus, in one NPF the profit may be more significant, but the risk of losing funds as well as when banks close their deposits, is also great.
In another option, income from non-state pension funds will be so insignificant that it would be more profitable to direct all received pension points to an insurance pension. In order to prevent this situation, it is recommended to carefully study all the proposals of non-state pension funds and themselves.It is best to choose those that have already survived one or two economic crises, which significantly increases the chances of both surviving the next one, if any, and preserving and increasing the pension funds of an individual citizen.
other methods
Naturally, not only the insurance and funded part of the pension can provide a decent old age. There are many other options that will allow you to freely manage your own funds and invest them in probably profitable projects. The simplest of them is a regular deposit.
Monthly replenishing it even for the smallest amount, given interest capitalization by old age there will accumulate quite a lot of funds that can be spent on something that I could not afford in my youth (or just to live comfortably). Also, a good option can be considered an investment in real estate (receiving rental payments can greatly facilitate future old age) or the purchase of gold or jewelry that never falls in price and constantly only rises in price.
Summary
Given the above, we can conclude that the insurance and funded part of the pension are two different things. Savings can be managed at will, but the responsibility for the loss of these funds will also lie directly with the citizen. An insurance pension is precisely those payments in old age that everyone is used to and guaranteed by the state.
Those citizens who are accustomed to control their finances themselves can be advised to try to get a higher income in old age, and those for whom reliability and stability are in the first place can always transfer all funds only to an insurance pension and not worry about possible financial losses. We hope that in this article all interested citizens received an answer to their question about what is the insurance and funded part of the pension, what is the difference between them and so on.
