OREANDA-NEWS. At the Moscow Financial Forum the Bank of Russia and the Ministry of Finance launched a proposal on upgrading pension savings system – an individual pension capital (IPC) scheme.

‘While developing this system we aimed for creating effective, clear and transparent instrument for workers to establish their pension capital and retain government guarantees,’ said Deputy Governor of the Bank of Russia Vladimir Chistyukhin, ‘the system we propose does not affect pension rights, which are calculated in points, and complements state pension’.

Under such framework, the IPC will be accumulated in non-governmental pension funds by means of unlimited voluntary contributions made by citizens. It is expected that the contributions will be supported by the government through tax deduction and deduction from social fee and will be automatically deposited into the IPC account. Employers will be able to participate in co-funding in exchange for certain benefits. Those citizens, who have compulsory pension insurance savings in their possession, will be able to transfer them as a contribution to the IPC account.

According to the plan, for workers, who don’t express their decision on whether to participate in the scheme, the IPC will be calculated automatically. However, it will be possible to suspend contributions through “contributions break”. Therefore, the strategy for savings will be determined by the citizens.

All IPC funds will be considered the property of the citizen and in some cases they may become accessible before the retirement.

Public survey conducted by the INFOM showed that in general population supports the idea of the pension being formed on accumulation basis. Alongside this, the majority of respondents expressed willingness to participate in the IPC system (only 18% of respondents refused to do so).