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Pension Reform In Russia
Russian pension benefit system reform was the major event of note in 2002.
The concept of the reform was not a spontaneous move, as Russia faced the challenge of then effective principle of distribution based on the public spirit uniting generations and regulating pension payments no longer working in early 90ies. The newly implemented mechanism is the one to directly correlate the existing payrolls with the total number of retireds.
The baseline of the pension system being implemented via reform is reinforcing the traditional "public spirit" system with two more systems with stronger viability created due to the pension tax paid by the companies to create insurance coverage and pension savings base with avenues to invest those assets into the stock market instruments.
The concept of savings and distribution in Russian pension benefit system building is the novelist one globally, being successfully implemented in the best-developed EU countries.
A key advantage of the newly launched pension system is access to avenues to independently manage your pension savings. Every employee in Russia has the right to independently decide what management company to choose as trustee to manage his or her pension savings.
Interfin CAPITAL Management Company was a winner of the bid offered by Russian finance ministry, and so was licensed to manage pension savings.
All in all, the pension reform is a vehicle for Russian people not only to be free to invest their, but also to increase their pension savings, as with the reform the focus was shifted to people's professional earnings and quality of operating standards of a management company. |
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