RU
Mar 21, 2017
Will it be recommended that Russians save for their pensions themselves?

Author: Marina Rudneva

The Ministry of Finance and the Central Bank of the Russian Federation have announced new changes in the country's pension system – introduction of the Individual Pension Capital (IPC)

The Ministry of Finance and the Central Bank of the Russian Federation have announced new changes in the country's pension system – introduction of the Individual Pension Capital (IPC).

The Ministry of Finance and the Central Bank of the Russian Federation have announced new changes in the country's pension system – introduction of the Individual Pension Capital (IPC).

The idea is that all employees will make contributions to the cumulative portion themselves – up to 6% of their salaries. On March 16, Alexey Moiseev, Deputy Minister of Finance, communicated that a corresponding bill is already being prepared.

"The idea of IPC is highly questionable among the participants of the pension market," Marina RUDNEVA, the CEO of FUTURE Financial Group, commented. "The key question is whether citizens are ready for independent contributions given that the average salary in Russia barely exceeds RUB 30 thousand. Taking into account the prices in the country, even minor deductions from their salaries (6% or a little over RUB 2 thousand) will be considerable for Russians.

The second problem is the household debt load. What means will people use to replenish their pension capitals if they have two or even three loans? Under such conditions a considerable proportion of Russians might forego IPC."