Against the background of regular discussion of pension bills, citizens became more interested in this topic. Previously, not everyone knew that labor payments were divided into two parts - insurance and funded. The first of these is spent on payments to current retirees. The second, on the contrary, turns into long-term savings. From what year of birth does the funded part of the pension take effect? Let's discuss this relevant issue in more detail.
Definition
What is the funded part of the pension? From what year of birth it is accrued, we learn a little later.
So, for the first time the concept of funded pension appeared in Russian legislation in 2002. It was then that citizens faced significant changes. The labor pension was divided into two parts: insurance and funded, which had not existed before. Moreover, each of them has its own source of funding. The first is paid by the state, and the second is formed at the expense of the citizen’s own savings, which make up six percent of the total amount that his employer transfers to the Russian Pension Fund every month. The government plans to revise this procedure for savings in 2019. Perhaps the formation of pension capital will become voluntary.
From what year of birth is a funded pension accrued?
The bill provides an unambiguous answer to this question. All Russian citizens born in 1967 or later are required to compulsorily form the funded part. In the future, their pension payments will consist of two parts. These are insurance payments from the state. As well as the funded part, which the citizen will form during the period of his labor activity.
Now you know from what year of birth the funded pension begins to take shape.
Who else can take part?
Despite the fact that for the above-mentioned category of citizens the formation of the funded part of the pension is an obligation, there are those for whom it is voluntary.
These are Russian citizens born before 1967, but who managed to decide before 2015 that they will form such savings on a voluntary basis.
Also, those who participate in the co-financing program or direct maternity capital funds for this can count on payments.
Benefits
As planned by the government, this part of the funds should not only be stored in the Pension Fund, but transferred to the management company. For what purpose? To the funded pension, from which year of birth it is accrued, you already know, was invested in various financial instruments. In the future, this will allow future pensioners to pay not only the savings they have accumulated, but also the profit received in this way.
purpose
As you know, Russian pensions are usually lower than the salary that an employee received. Sometimes the difference can be significant. The meaning of the funded part of the pension is to compensate for this gap. The more a citizen will be deducted to the Pension Fund, the higher will be his return on investment, which is managed by management companies and specialized funds.
By adopting the bill and establishing with what year of birth the funded pension begins, the government set itself good tasks. Indeed, thanks to competent investment and financial management, at the time of termination of employment, citizens could receive increased payments.
Freezing
However, in 2014 the funded pension was frozen, from which year of birth it is accrued, it was said above.
For each employee, the employer monthly transfers twenty-two percent of the salary to the Pension Fund of Russia. Six percent comprise the funded part. However, now all deductions do not become part of the savings, but are converted into points. The government promises that by the time they finish their work, the accumulated points of each citizen will be transferred to money again and will pay a pension based on these calculations.
However, in this case, the funded pension loses all meaning, from which year of birth it is accrued, you know. Indeed, before future retirees could invest money, entrusting their management to various organizations. Now there is no such possibility. After all, points are impossible to invest. Accordingly, to increase the funded part of the pension, as originally planned, will not work.
What will happen to the funded pension?
From what year of birth these accruals are paid, you know. Recall that citizens born in 1967 and younger are required to form the funded part of the pension. To date, the Russian government has extended the freeze until 2020. What will happen after and how the situation will change in the future is unknown.
What will happen to the accumulated money? They say that the government does not pretend to them. Russian citizens, as before, can transfer their own savings from one fund to another if they are attracted by profitability.
However, no new deductions will be received. Accordingly, the size of the current savings of the citizen will not change. And some did not manage to form a funded pension at all. This applies to those who began their careers in 2014 or later.
So, now you know a lot about the funded part of the pension. This information will help to understand not only the formation mechanism, but also other features. In particular, the fact that at the moment, instead of cash deductions, Russian citizens, that is, future pensioners, receive points.