Home  Journals  Finance and Credit  42(618) - 2014 November

A mechanism of investment risks regulation of participants of accumulative component of the pension system of the Russian Federation and ways of its improvement

Available online: 3 November 2014

Subject Heading: Pension system

JEL Classification: 

Pages: 34-44

The article analyses the mechanism of investment risks regulation, which are undertaken by non-State pension funds (NSPF) and management companies, which are engaged in pension accumulations investment. The author evaluates the consequences of reform of the Russian accumulative pension system of 2013, and also substantiates the need of preservation of binding character of funded pensions for long-term risks diversification of the insured persons. The paper considers the reasons hampering the development of voluntary pension insurance in Russia, and makes proposal on coordination of restrictions on the investment structure of pension accumulation with the term prior to the insured person retirement, and the change of a procedure of guarantee of the pension accumulation completion, to enable the realization of investment strategy of life cycle in the Russian conditions. The author sets forth forcefully the need to expand a range of financial instruments, which may attract pension accumulation of the youngest insured persons, and to mitigate the restrictions on non-negative character of profitability of pension accumulations investment of NPF, and the private management companies within the short-term horizon period. The paper provides proposals on the use of the risk-based approaches to definition of contributions rates to a reserve in compliance with mandatory pension insurance. The article also describes procedure of functioning of fund on guaranteeing pension accumulations depending on an investment portfolio structure, and also the measures to increase a minimum level of sufficiency of proprietary funds of NPF, which participate in system of the guarantee of insured person's rights. The article proposes to introduce the State guarantees of non-negativity of real profitability of the State management company's investment and a mechanism of realization, envisaging subsidies payment from the federal budget to the Pension Fund of the Russian Federation for replenishment of retirement accounts of insured persons. The author identifies the reserves to reduce operational costs of an accumulative component of the Russian pension system connected with the stimulation of mergers and acquisitions of NPF and with removal of restrictions on their independent placement of pension accumulations and reserves.

Keywords: pension accumulations, investment risks, life cycle strategy, guaranteeing pension accumulation fund, risk-based approaches regulation

References:

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