From what year is the funded pension accrued: payment periods

The very concept of “funded part of a pension” appeared relatively recently in Russian legislation. In 2001, Federal Law No. 173 was adopted, where this term was used for the first time. The law was the “first sign” of the upcoming pension reforms, and, we apologize for the pun, this swallow did not fly far.

At that time, only one thing was done - monthly pension payments were conditionally divided into insurance (basic) and savings (investment). It was agreed that their source of funding was different. The innovation remained purely virtual. In practice, the funded part of the pension, in accordance with the law adopted in 2001, was never implemented.

However, it is currently very real. And this article will tell you how this happened, and what this fact means for future retirees.

From what year is the accumulative part of the pension accrued?

A new law on funded pensions was adopted in Russia in 2013. By this time, the pension reform, prepared by many other legislative changes, gradually “matured” and began to be carried out more actively. Federal Law No. 242 became a more balanced, thoughtful and closer to reality legislative act than Federal Law No. 173, which never “worked.” Almost simultaneously with it, another “pension” law was adopted - Federal Law No. 400. It regulated pension insurance.

In 2015, Russian citizens were offered a choice:

• Use the usual insurance pension model
• Divide the pension account into two parts - insurance and investment.

The overwhelming majority of those whose pension was, as they say, “just around the corner,” preferred the previous, familiar and safe insurance model. This is understandable. Ordinary Russian “post-Soviet” citizens had mostly negative investment experiences. In addition, older people are not too inclined to financial experiments with funds that will be their only source of livelihood for the rest of their lives. So they preferred the bird in the hand.

NPF Sberbank

It is a proven fund, the sole shareholder of which is the well-known PJSC Sberbank of Russia. Its most important advantage is its high reliability, due to its high trust rating among citizens. Of course, the many years of experience of Sberbank itself and its status as a state bank imposes certain obligations to citizens, so the bank does not make risky transactions when investing.

Another argument in favor of this NPF is its wide customer service network. Investors have no questions about where to conclude an agreement on the transfer of a funded pension and how to find out information about savings.

Funded pension as an experiment

The investment pension in Russia was introduced as an experiment. What is its essence and idea?

• The personal account of the future pensioner is not in the Pension Fund, but in a non-state pension fund or a management company. Non-governmental pension fund or management company, respectively
• The account is not a savings account, but an investment account. That is, the funds on it are used to finance promising projects and are actively growing.
• By the time of retirement, the amount in a citizen’s personal account is no longer the amount made up of monthly contributions that the employer makes to the Pension Fund according to the law. It is much larger, since smart investments are known to bring significant profits (unlike interest on bank deposits, which most often only compensate for the level of current inflation).
• The idea is that after finishing work, a citizen can receive monthly payments comparable to his previous salary. That is, the usual standard of living will inevitably stop falling after a person retires.

How to find out the amount of savings

The easiest way to find out the information you are interested in regarding the status of your personal account is to check through your personal account, in which you must first register. It is also necessary, upon a separate request, to register in the PFR information system, after which the corresponding section will be available for verification, in which you can create a request and send it to the financial institution. After processing the request, you will be able to view the statement.

You can receive a statement on paper. To do this, you need to apply in your personal account and visit a Sberbank branch with your passport and SNILS. The application form can also be obtained on site. The bank manager will provide full details of account transactions. The client will receive a statement within one month in the following way:

• to the specified email address;
• by mail to the postal address specified by the client;
• can be picked up at the same Sberbank branch.

Important! In your personal account you can obtain other information that may be of interest to citizens who are clients of NPFs. This is information on individual pension plans, the ability to pay contributions (including using the automatic payment service), and track the status of applications submitted to the NPF. The list of available services is constantly expanding.

When visiting a bank branch, you can obtain the necessary information about pension savings using an ATM or terminal. We check the status on the display or print it in the form of a receipt. In case of difficulties, you can ask for help from a consultant in the hall.

You can request an extract online through the State Services Internet resource. In a special section, you can generate information for a full or user-selected period.

Validity periods and features of asset placement

Let's repeat it again. With the funded pension model, funds are not kept in an account, but are constantly in investment circulation.

Funds may be located:

• On a pensioner's personal account
• On a special account of the Pension Fund

The funds in your personal account are constantly growing, thanks to a special investment mechanism.

Savings account assets consist of several types of income:

• Pension payments from the place of work
• Co-financing program funds (when monthly contributions are made up of citizen funds and state subsidies)
• Maternity capital (one of the few permitted ways to use maternity capital is to place it in the mother’s savings pension account)

You can find out how much money is in your personal savings account at any time. This is usually done on the official websites of the NPF or management company where the account is registered.

The experimental funded pension covers two categories of citizens:

• Those born in 1967 and later
• Those who decided to create a pension savings account before the end of 2015 (regardless of age)

At the same time, only citizens whose year of birth is 1967 and subsequent have the right to transfer monthly pension contributions from their place of work to a savings account. Older people can only use maternity capital or co-financing program money for this purpose.

How long will it last?

There is no specific information yet about how long this type of pension system will last. However, a review of this issue is planned in 2021 to finalize the method of using funded contributions.

The Ministry of Finance, together with the Central Bank, propose to transfer such contributions to the category of voluntary ones in excess of the established rates. This will be an individual pension capital, to which employers will contribute up to 6%.

Other positive points were discussed:

• Possibility to withdraw up to 20% of the accumulated amount for personal purposes.
• In unforeseen difficult situations, the opportunity to withdraw the entire amount of the IPC.
• Compensation for the increased percentage of pension contributions through tax deductions.

Time will tell whether such a system will be adopted; for now it is impossible to say anything definitely.

Benefits of investment pension provision

Deciding how to provide your own pension in the future is a psychologically difficult matter. I would like to take into account all the nuances and protect myself from unpleasant shocks in old age.

Insurance coverage has one undoubted advantage - it is stable. Another thing is that, as a rule, we are talking about a very small, stable amount of monthly pension. Even with extensive experience and additional bonuses, it rarely approaches the size of the former salary. And this is the main reason why retirees continue to work, even when they no longer have the strength to do so. “You can’t live on a pension,” that’s what people say.

The idea of ​​a funded pension is precisely that you can “live” on it - eat well, buy new clothes, travel, indulge in entertainment. That is, do not count every penny. Due to the funded part of pension contributions, the size of the insurance part is slightly reduced, but the investment pension itself has a number of advantages.

The benefits of a funded pension include:

• The ability to choose any fund or management company from those that invest most profitably
• The absence of “points” that are unclear to the uninitiated person and the transfer of the amount of profit directly to the account in cash
• Full ownership of the savings account. In particular, the money in the savings account does not “burn out” after the death of the pensioner, but is inherited by his relatives. A retirement savings account can be bequeathed.

Transfer of pension savings

If there is a need to transfer funds to a new non-state PF, the following steps are taken:

1. The most suitable investment option is selected. It is advisable to obtain as much information as possible about each possible option.
2. The transfer application form is filled out. There are 2 types of transfer: early and urgent.
3. Applying to a new NPF with an application.
4. Waiting for the application to be reviewed.

The same sequence of actions applies to all pension funds.

How is a funded pension paid?

Currently, Federal Law No. 242 provides for several options for paying funded pensions to those who receive the right to a pension due to age or for other reasons. Each of them has its own characteristics.

1. One-time payments

That is, withdrawal of all funds accumulated in the account in full. Not everyone who wants to can do this, but only certain categories of citizens. Namely:

• Those who have received a disability pension but do not receive an old-age pension
• Those retired due to age without the length of service required to receive a labor pension
• Holders of the minimum funded part (less than 5% of the labor pension). This category includes citizens born before 1967, for whom the employer paid the funded part of the pension in 2002-2004. Subsequently, people of this age stopped taking the accumulative part. There is currently an average of about 5,000 rubles in their accounts. This amount can be received in full at once.

A citizen who has the right to receive a one-time funded pension must submit documents confirming this right to the fund department. The money will be given to him in 1-2 months.

2. Urgent payments

They can be received by those who participate in the co-financing program or have invested maternity capital in the funded part of their pension. The person himself determines how long he wants to receive a funded pension. The only condition is that the period should not be less than 10 years.

That is, the amount in the account is divided into equal parts - for example, 120 months if you plan to receive a pension within 10 years, or 180 if the period of receipt is 15 years. Each installment is then paid monthly.

If a pensioner dies earlier, the remainder of the funds is received by his heirs.

3. Supplement to the basic pension

This is the most common method for pensioners. A person receives his due labor pension every month, plus an increase from funded pension funds.

What will be the size of the increase? It depends on how much money is in the account. The Pension Fund determines the expected period of pension payments based on the average life expectancy of a pensioner. This is 18 years old. The amount on the account is divided into 216 parts (months) and paid accordingly.

The last two methods can be combined. For example, the funded part formed through employer contributions is received in the form of an increase to the insurance pension. And a funded pension received with the participation of MSK or a co-financing program is in the form of urgent payments, say, for 10 years.

Features of accrual for people born before 1967

For people born before 1967, there is a special procedure for calculating benefits. Regular cash benefits can be applied for by people who fall into one of these categories:

1. Representatives of the stronger sex no older than 1953 and women born no earlier than 1957, who in the period from 2002 to 2004 were registered for work under an employment contract, and their employer made appropriate insurance contributions.
2. Persons who voluntarily contributed funds for the formation of pension savings.

Thus, people who have savings in a state extra-budgetary fund of the Russian Federation (or non-state funds) can receive additional pension payments. Let's look at an example of how the amount of additional cash receipts is determined.

Citizen Olga Nikolaevna Mankova, born in 1960, was officially employed in the period from 2002 to 2004. According to the then existing regulatory act, the employer monthly transferred 6% of Olga’s salary to the Pension Fund. The citizen also voluntarily contributed her own funds. As a result, Olga Nikolaevna’s savings amounted to 118,818 rubles.

According to the law, the volume of funded pension payments is determined by dividing the amount of available savings by the number of months of the possible period for issuing benefits (in 2021 this number is 246 months).

Thus: 118,818/246 = 483 rubles.

The state-guaranteed monthly payment for citizen Mankova is 7,140 rubles. Let’s sum up the two types of pensions: 7140+483=7,623 – this is the amount of monthly cash receipts.

By dividing the funded component of monthly income by the total pension and multiplying by 100%, we find out the percentage ratio of the two types of pensions: 483/7 623*100 = 6.3%.

According to the law, such a pension will be paid monthly. It is impossible to receive the entire amount at a time, since the percentage ratio exceeds 5%.

Where can I find out the amount and how does it change with age?

The number of savings in a personal account can be found in your personal account of the Unified Portal of State Services or at a Sberbank branch.

To find out the amount of accumulated savings in your personal account, you need to:

1. Log in to the site.
2. Enter the necessary data from your identification document and the personal account number contained in the SSPS.

   
   Checking pension savings on the State Services portal

3. Go to the “Pension Savings” tab.

You can also fill out a special application at a Sberbank branch, after which data on savings will appear in your personal account on the bank’s official website.

If savings are invested, then savings constantly increase.

If a person entitled to receive a pension does not apply to the pension fund and does not cash out savings, the expected benefit period is gradually reduced. The shorter this period, the greater the amount will be paid each month. However, it should be remembered that the expected period must exceed 168 months.

From what date does the pension accrue?

The funded pension is accrued from the moment the old-age pension and/or labor pension is calculated. This process does not occur automatically, either in relation to the funded pension or in relation to the insurance pension. Even if retirement age has already arrived. In other words, if a citizen does not apply to the Pension Fund for the accrual and payment of a pension, no one will run after him with an offer to receive the pension required by law.

The Pension Fund calculates pensions from the moment a citizen submits a corresponding application. But only if all the necessary documents are submitted immediately and the application is accepted. If any document is missing, Pension Fund employees explain which document is needed and how it can be obtained.

The application will be accepted only when the potential pensioner brings the entire package of necessary documents. Consequently, only then will the pension - insurance and funded - be accrued.

It is not possible to apply for an investment pension before reaching retirement age and applying for an insurance pension.

What documents are needed for registration?

To apply for pension payments, you must prepare the following documents:

• relevant statement;
• passport or residence permit (for foreign citizens);
• insurance certificate;
• an official personal document containing records of a citizen’s employment;
• bank account details.

If pension savings were not formed in a state fund, then the list of documents may differ. Also, additional certificates may be required when applying for a one-time or urgent payment.

Point system when calculating pensions

The last section of our article is only indirectly related to the funded part of the pension. But, nevertheless, it is very important.

When calculating the amount of the insurance pension until 2014, only the total length of service and salary were taken into account. Since 2015, so-called pension coefficient points have been introduced. That is, what matters is not only the length of service (according to the work book), but also exactly how much money the employer, or the potential pensioner himself, transferred to the Pension Fund.

In practice, this means that if a citizen does not have enough pension points, his old-age insurance pension will be significantly lower than he planned. This situation can be corrected.

Points are calculated only for contributions to the insurance part of the pension, but not to the funded one. A citizen born after 1967 has the right at any time to refuse to form the funded part of the pension and direct all contributions to the insurance part in order to increase its size.

If you still have questions related to the calculation of the funded part of your pension, please contact the lawyers of the Prav.io portal for advice.

Questions and answers

No. 1. How are savings formed?

A funded pension is created through contributions from the enterprise (employer) and income from investing funds.

No. 2. Who manages the money of citizens who did not choose an insurer?

Citizens have the right to independently choose a management company. If the employee did not submit an application, then by default the money goes to the Pension Fund of Russia. Vnesheconombank is investing the funds. Trust management of money occurs under an agreement with the Pension Fund. If desired, a person can change the management company.

No. 3. How quickly does the transition from the Pension Fund to the NFP take place?

The basis for switching to a new insurer is the application of the insured person. The general procedure is that the transition takes place 5 years after submitting the application. It allows you to transfer the funded part of a person’s pension along with investment income to a new insurer. When submitting an application for early transfer, the action is carried out for the next year. However, the person’s savings will be transferred to the NPF without taking into account investment profits from the date of the last calculation. More information here.

Formation and payment procedure

Every person can create a funded part subject to certain conditions prescribed by law:

• reaching the retirement age limit, which allows you to retire;
• availability of money in your personal account;
• the size of the funded component is > 5% compared to the insurance pension.

With a lower percentage value, it is possible to receive a payment in the amount of all accumulated funds once.

Elena Smirnova

Pension lawyer, ready to answer your questions.

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To establish payment, you will need to collect all the necessary documents and submit an application with the corresponding request.

What to do if you don’t know where the funds are located

It is no secret to many that accumulative pension insurance agreements could be “offered” to citizens for signing in a bank, store, insurance company, etc. A citizen might not even know in which management fund his funds are located.

Starting from 2021, the procedure for selecting a non-state pension fund or transferring from one fund to another has been changed . From now on, the insured person can apply to the Pension Fund only in person (including electronically). Therefore, such semi-legal schemes have since been suppressed by the legislator.

Since a similar scheme could have been applied previously, it is important to carry out regular periodic monitoring of the placement of such funds, including the management organization and the result of its investment activities.

And for this it is necessary to obtain the relevant information using one of the tools offered by the state. It is worth mentioning right away that it is not difficult to obtain such information; it must be provided to the citizen upon his request.

Deadlines

When acquiring the right to register a savings component, a citizen can visit the Pension Fund at any time without a time limit. The application with all attached documents is considered 10 days from the date of receipt by the Pension Fund employees.

In case of a missing document, it is proposed to inform the organization within up to 3 months from the date of receipt of this information.

The funded pension is transferred simultaneously with the insurance pension no later than 2 months from the date of a positive decision.

When forming savings in non-governmental organizations, this is where you should turn.

Types of retirement savings

Currently, in the field of pension provision, there are rules according to which accumulated savings for retirement are divided into 3 components:

1. The fixed part is a state cash benefit received by every citizen of the country whose retirement age is reached. The amount of payment may vary depending on the age category, the number of dependent persons, the subject of stay and the presence of serious pathologies (No. 16-FZ Art. 16).
2. The insurance part is a payment, the amount of which is determined by contributions paid by the person who has an employment relationship with the employee. The amount of cash benefits depends on the length of service of the citizen.
3. The funded part is an additional payment to the pension.