How is the funded part of pension?

The Russian Pension system. Among the public funds of social purpose is the most important extra-budgetary Fund, from which pensions are paid. In Soviet time it was used so-called unfunded pension system, which provided payments to retirees out of current operating income. This means that the pension system was based on the principle of solidarity of generations, i.e. pensions are paid by contributions from those who worked in the national economy. In a market economy, carried out pension reform. It provides for the establishment of a new pension system.

One level form the basic labour pension provided to all citizens who have attained the age for retirement; the disabled, which provided the necessary material conditions; dependents left without financial support. Second level – insurance labour pension, they are intended for all people employed. Third level – this cumulative part of the pension, which should allow it to reach a higher standard of living. Such a system does not depend on the number of employees and retirees, allows you to increase the amount of payments (since this is the cumulative part of the pension), provides growth of long-term investments in the economy at the expense of accumulated funds.

The income of the pension Fund is derived through insurance premiums, taxes, income from temporary placement of free funds on Bank accounts, income from use of property etc. of the Cumulative part of the pension is placed on the individual accounts of pensioners. The competition authority pension funds not belonging to the state. Not all pensioners have savings. To date, there are approximately 500 thousand. Funded part of pensions accrued since 2005.

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Citizens were granted the right to decide where to keep their savings. People who have savings accounts in pension funds, are beginning to retire. Many wonder how to get the funded part of pension? It is expected that in 2012 it can be given to those who transferred the money to the pension funds, which are owned by private individuals. However, in the next year provided for the payment of the cumulative part of pensions from the well-known government pension Fund. Currently, the press actively there is a discussion about increasing the period of retirement. The fact that the pension system is still PAYG, only slightly modernized. Our country is now 75 million rabotayushih 88 million pensioners. The expected deterioration. The proportion of disabled people equal to about one-fifth of the total population, by 2020 it will be equal to 25%, and by 2030, 30%.

Even in 2011, the PFR expenditure exceeded revenue by one trillion rubles, and this year (2012), the excess will amount to 1.75 trillion rubles. This position could be called catastrophe, if not sky-high oil prices. Some senior officials believe that an earlier retirement would help solve the problem. But according to the generally accepted estimates of the cost savings of PFR from this increase will be 80 – 90 billion rubles, which is comparable with the deficit.

We could go the way of the payment of insurance and basic pensions only to pensioners. Due to the low standard of living many millions of pensioners are working in the workplace, therefore, would receive lower pensions. However, the government is unlikely to be solved by this reduction, as the pensions and wages barely allow pensioners to approach the income of the middle class.

Many economists believe that we need to change the sources of the FIU, remitting back rental payments, and to strengthen control over the actual use of the funds to prevent their misappropriation. But the main resource of revenues of the pension Fund is the organization of new industries and attracting young people to be active.