Finance, Insurance
What is the accumulative and insurance part of a pension? The term of transfer of the funded part of the pension. What part of the pension is an insurance, and which
Thinking about your future and planning your own old age is a very rational approach to life. And in Western countries this desire of citizens is fully supported by the current legislation for many decades. In Russia, pension reform has been in effect for a long time, a little more than a decade. Despite this, many working citizens until today can not understand what is the accumulative and insurance part of the pension, and, consequently, what amount of security they will receive in old age. In order to understand this issue, you need to read the following information below.
Until 2002, the calculation of pension provision for citizens was based on the "principle of solidarity", which was used since the times of the USSR. Abroad such a distribution system was called "pay as you go", which means "pay while you go" in Russian. The essence of this system was that the pension contributions of all working citizens of the country were distributed among people who are on a well-deserved rest at the moment. This approach was quite logical and justified, but only until the moment when the pension load began to increase rapidly. Previously, the minimum amount of provision for one pensioner was assigned to 2 - 2.5 working people, but with the deterioration of the demographic situation in the country, this figure rapidly declined. And, according to experts, already in 2020, this ratio will be 1: 1.
In addition, contributions to the insurance part of the pension, which are expensed by working citizens in the PF, for the state fulfill the function of investments in the modernization of the country's economy. By changing the pension legislation, the state not only ensures the future of its people, but also receives a substantial infusion of capital into its own development.
The essence of the reform and the formation of labor pension
Since 2002, four laws regulating the balanced work of the pension system have come into force. However, it is impossible to speak about cardinal changes, in accordance with the content of these documents, as they are a smooth transition from the distribution system that existed earlier to the distribution-accumulation system.
Since the entry into force of the new legislation, the formation of a labor pension is carried out in the system of TSA (compulsory pension insurance), and consists of three main parts: insurance, basic and funded. As for the size of the pension provision of citizens, it is calculated according to the formula established by federal legislation.
In general, the reform allowed Russian citizens to independently regulate their pensions, increasing their own savings with the help of private management companies or specialized non-government pension funds.
The main problem of pensioners
Despite the fact that pension reform in Russia has been operating for a long time, many pensioners and working citizens have not yet figured out what the accumulative and insurance part of the pension is. And, consequently, can not properly dispose of their savings and get a decent profit. That is why, starting to consider the modern pension system, it is necessary to study the basic concepts. And only after this, to argue, whether to transfer the funded part of the pension and how to do it?
The pension system of 2002-2010
All employers of the federation, in accordance with the current legislation, must pay monthly contributions to the PF at a rate of 20% of the salary of each employee. Until the end of 2007, the rate was divided into three parts: 4% was funded, 10% - insurance, and, accordingly, 6% - basic. This distribution was not entirely fair to citizens who wanted to increase their income from investments and to receive a decent monthly security on retirement . Since January 2008, amendments to the laws on pension reform have come into force. In accordance with them, the percentage of the insurance part of the pension was reduced by 2 units, which were transferred to a funded article.
As for individual entrepreneurs, then, according to the law, they have an obligation to pay a fixed monthly rate to the PF on a monthly basis. For organizations of any form of ownership using a special simplified taxation system, contributions to the insurance part of the pension at a rate of 10% and 4% to the funded one are provided.
Base part of pension
The lowest component of the pension is the base part, which is a strictly fixed amount established by the state as a guarantee obligation to citizens. Initially since 2002, it was 450 rubles, but every year this amount is indexed taking into account inflation.
It is worth noting that the formally basic part of the pension is financed from monthly contributions, which employers deduct to the PF. However, in fact, this amount is not enough for payments, so it will be compensated by the federal budget. After all, regardless of the size of the insurance base part of the pension received in the current period on the accounts of the PF, the state must fulfill its obligations to provide socially unprotected citizens.
This amount of security is assigned to all citizens who have reached retirement age, whose experience of robots is more than five years. Adjusted to increase the rate is only for persons over 80 years of age, disabled people and citizens with disabled dependents. In principle, this amount combined previous surcharges, compensation allowances and a minimum pension. Its main function is to provide some basic social guarantee, which is confirmed by its very name.
Since the beginning of 2010, this component of the obligation has disappeared from the pension system, and its place was taken by a fixed part of the insurance pension.
Peculiarities of funded pension
The pension reform that has been in effect in Russia in recent years presupposes the use of such a concept as a funded part of the pension, which is formed from 6% of contributions paid monthly by the employer in the PF. A distinctive feature of it from other components of pension provision is that it is a "live" means, the increase in the size of which depends entirely on the employee. After all, the essence of the funded part of the pension is the ability to independently invest their money. How much it will be possible to increase the accumulated capital depends on the choice of the correct investment strategy, in other words, to whom the money will be given to management.
Citizens began to receive the first payments under this article after the reform began on July 1, 2012, when Law No. 360-FZ came into force (in the people this document is better known as the "Paying Law"). Of course, the amounts received by citizens are not very large, as, in principle, and the period of accumulation, but this was the first step in self-provision of old age.
The reform of the pension system in the Russian Federation continues at the present time. Many laws have already been signed that regulate deductions and the way of forming the accumulative part. One of the innovations that everyone should know is that, as early as 2015, this component of the pension provision will be formed for all workers "by default". This means that without submitting an appropriate application for transfer of funds under the management of other organizations, the funded part automatically goes into insurance.
To date, there are three options for managing pension savings, and each of them has its own advantages, as well as "pitfalls."
So, the first thing you can do with your accumulative pension savings is simply to leave them in the state pension fund. The option is good, it does not take time and effort to document the documentation, but by choosing it, one can only hope that by the time of coming to a well-deserved rest, inflation will leave at least a small sum for old age. Another significant drawback is that a person does not conclude an individual contract with the PF and does not have reliable information about the state of his money. The advantage of such a management can be called the fact that the guarantor of the return of financial resources is the state itself.
The second option is much more profitable than the first one and it amounts to the fact that the funded part of the pension can be transferred to the management of the management company. The yield from such investment is insignificant, but it exceeds inflation, which guarantees the safety of savings. In this version, like the previous one, the guarantor is the state, and a person can receive information about the state of his savings account once a year . Despite the economic benefits, financial management of the Criminal Code has the highest degree of risk, as these organizations are entitled to invest in income-generating instruments.
The third option can be used by people who are not only well-versed in what is the accumulative and insurance part of the pension, but are also ready to give up the protection of the federation by entrusting their money to the Non-State Pension Fund. Since the signing of the individual agreement, the accumulative part of the pension is transferred to the ownership of the NPF. Undoubtedly, the yield from such an investment will be much higher than inflation, but even this can not guarantee the fulfillment of obligations to return funds.
Before choosing the option of investing in the funded part of the pension provision for securing old age, all options should be carefully considered.
How to transfer the funded part of the pension?
To date, active citizens of the pension reform who participate in the funded program are Russian citizens born after 1967. They can independently control part of their pension provision and decide where to invest this amount of funds. Many, of course, without creating themselves additional difficulties, prefer to leave money in the pension fund of the federation and hope only for the state. But those who are not satisfied with the annual income below inflation can transfer their savings to a management company or an APF. The time limit for transferring the funded part of the pension is not limited by the time frame, so the application can be submitted at any time. However, the investment agreement will enter into force only from January next year, and money from the federal PF to the new management company is transferred until March 31. If for any reason the insured person is dissatisfied with the result of cooperation with the management company, then after one year the funded part of the pension can be transferred to another MC.
The accumulative component of a pension today
Loyal conditions for investing accumulation funds operated in the Russian Federation only until 2013, after the state at the legislative level took advantage of inaction of citizens who simply do not engage in their investments. But not everything is as categorical as it seems at first glance. Those who seriously want to tackle the issue of ensuring their own old age, this opportunity is provided in full. It is for this purpose that the funded part of the pension was extended, more precisely the period when people can independently choose the rate and company for investment. Until 2015, any working citizen can apply for preservation of 6% of contributions to the accumulation fund. If such a document is not filed, the state has the right to reduce this rate to 2% or even to transfer it all to the percentage of the insurance part of the pension. While there is a chance to save and successfully invest their accumulative pension funds, it is necessary to apply urgently to the PF.
How to receive pension payments?
From the moment of entering the deserved rest every citizen who participated in the accumulative pension program has the right to receive his money. You can do this in three ways, convenient for a pensioner. First, if the amount of savings is insignificant, a lump sum payment can be made, which will be effected within 90 days from the date of submission of the relevant application. Secondly, payments can be extended for a certain period of time and systematically receive fixed amounts. Thirdly, if the insurance part of the old-age pension is small, you can divide the accumulated funds for the period of survival and receive them as a bonus.
But, as in every rule, there are exceptions to the law on the payment of funded pensions, allowing for urgent payments. However, they rely only on the category of insured persons who participated in the co-financing of the program and paid contributions independently. So, for example, it can be women who sent part of the maternity capital to the PF. The term of such payments can not be less than 10 years.
Inheritance of pension savings
Knowing what the accumulative and insurance part of the pension is, it is not difficult to guess which of them is more likely to provide a decent old age. But this is not all the benefits of the cumulative component. Receivers of the insured person may inherit it. To do this, it is enough to apply to the Criminal Code or pension fund and file the corresponding package of documents.
Insurance part of pension
Considering the essence of the insurance part of the pension, we can say with confidence that this component is part of the old pension system. After all, all contributions paid by employers to this security clause are placed at the disposal of the state and distributed among current pensioners. Consequently, the insurance part of old-age pension is only a concept that is conditional-accumulative.
Even before 2010, this component of pension provision was allocated to a separate category, and it accounted for only 8% of the monthly contributions of employers. But then the percentage of the insurance part of the pension supplemented the basic, significantly increasing the insurance fund. This redirection of funds available to the state made it possible to ensure the payment of pension obligations to all current pensioners without using additional investments.
Basic terminology in the calculation of pension provision
Before considering what part of the pension is an insurance, and which savings will be paid to a person after reaching the retirement age, several other important concepts need to be considered. So, under the commonly used term "pension capital" should be understood as the amount of money, formed from the monthly contributions of the employee for all years of seniority. The second, but not less important, concept that you need to know in order to calculate the size of the insurance part of a pension is the "survival period". The use of this term, at first glance, seems rather rude and disrespectful to pensioners, but without it it is simply impossible to calculate the monthly provision. It denotes the probable period of survival of citizens of respectable age and is equal for all, but this does not mean that after the specified time a person will stop receiving a pension. In the future, the state budget is paid in the same amount as before.
How to calculate pension provision?
To understand what part of an insurance pension will be paid to a citizen after reaching the retirement age, it is necessary to know exactly the amount of pension capital and the statutory period of survival. And the last indicator in 2002 was 12 years and with each year increased by 12 months. Thus, in 2013 the period was 228 months.
Calculate the amount of monthly insurance coverage for one simple mathematical formula: SPP = PC / SD + CP, where PC - calculated pension capital, formed from contributions of the pensioner for years of working experience; SD - the established period of payment of pensions (life expectancy); CP is a fixed part of the insurance pension, which was formerly called the base part.
In order for the received amount of pension provision to correspond to the level of inflation, the insurance part of the labor pension is indexed annually. Such an approach to preserving citizens' incomes allows preserving the stability of the living conditions of pensioners.
The impact of reform on the lives of military pensioners
In all the laws of the pension reform, which came into force in 2002, the rights of military pensioners to receive a well-deserved pension in full were violated. In other words, only the insurance part of the military pension relied on the categories of people who had given the state debts for many years and went on a deserved rest. If, after leaving the armed forces, a person continued to work in any other industry and for him the employer paid contributions to the PF, these amounts simply remained in the budget of the federation. Such injustice caused a lot of outrage not only among the military, but also other categories of budget workers, so the problem had to be solved quickly.
In the middle of 2008, the situation changed dramatically, as several amendments to the basic laws on pension reform came into effect. From that moment, the insurance part of the pension to military pensioners began to be calculated on the basis of the total capital. In other words, if a person has ended his service in the ranks of the armed forces and continued to work in civilian enterprises, all monthly contributions to the PF went to the formation of his calculated capital.
As the statistics show, the pension reform of recent years may have slightly improved the financial well-being of the elderly, but it has not achieved its goals. The number of pensioners is quite large, accordingly, their insurance part of pension remains at a minimum. What is it: a mistake of financiers or a detailed plan? It's extremely difficult to answer this question today, and it's pointless. It is too late to look for the cause of failure, it is necessary to solve the problem that has arisen, and the PF has found an advantageous way out of the situation for itself: to increase the size of the calculated capital from the contributions of the working population.
Of course, in the new pension reform, we are not talking about an increase in interest rates, but only about redirecting funds from the Criminal Code to the authority of the federal budget. For those citizens who did not bother with information about what the accumulative and insurance part of the pension is, everything will become even easier. They will not need to think about investment of funds, but only rely on the state, which will become the guarantor of their pension provision. Thus, the PF will have much more funds available to pay off its own obligations, but only time will show how long such a system can exist.
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