29.04.2016, 12:20
Pension Funds in Financial Market: 2015 Outcome
OREANDA-NEWS. The amount of pension savings, including those accumulated in the Pension Fund of the Russian Federation (hereinafter, the PFR), were up to 5.9% of GDP on 2015 results against 5.1% in the previous year, according to the reporting data on the Bank of Russia website.
The pension assets of non-governmental pension funds (NPFs) grew by 51.2% over the past year to 1.7 trillion rubles (2.1% of GDP). The second quarter of 2015 accounted for major cash inflow due to cash remittances to the funds admitted to the pension insurance system on the results of the transitional campaign of 2013 - 2014 as well as due to receipts of insurance premiums paid for the second half of 2013.
Against the backdrop of moderate cash inflow under non-governmental pension schemes, offsetting the amount of non-governmental pension payments to a large extent, the NPFs' pension reserves were up to 10.5%, insignificantly exceeding ? one trillion (1.2% of GDP).
Regulatory changes occurred, including the cancelled loss compensation rule at the end of each year as well as a restriction on investing in deposits and long-term securities of banks and financial institutions contributed to NPF reinvesting in more lucrative stock market instruments. Investments increased considerably in corporate bonds and shares on 2015 results due to the decreased proportion of bank deposits in the portfolio. For instance, the proportion of corporate bonds in the pension savings portfolio grew by 8 percentage points to 46% over 2015, the proportion of shares grew by 6 percentage points to 13%, whereas the contribution of bank deposits was down by 12 percentage points to 19%.
High interest rates on fixed income instruments, cost recovery of financial assets as well as higher percentage of the stock market instruments added to the growth of weighted average portfolio yield of the NPFs' pension assets to 10.8% in 2015 from 4.9% in the previous year.
The pension assets of non-governmental pension funds (NPFs) grew by 51.2% over the past year to 1.7 trillion rubles (2.1% of GDP). The second quarter of 2015 accounted for major cash inflow due to cash remittances to the funds admitted to the pension insurance system on the results of the transitional campaign of 2013 - 2014 as well as due to receipts of insurance premiums paid for the second half of 2013.
Against the backdrop of moderate cash inflow under non-governmental pension schemes, offsetting the amount of non-governmental pension payments to a large extent, the NPFs' pension reserves were up to 10.5%, insignificantly exceeding ? one trillion (1.2% of GDP).
Regulatory changes occurred, including the cancelled loss compensation rule at the end of each year as well as a restriction on investing in deposits and long-term securities of banks and financial institutions contributed to NPF reinvesting in more lucrative stock market instruments. Investments increased considerably in corporate bonds and shares on 2015 results due to the decreased proportion of bank deposits in the portfolio. For instance, the proportion of corporate bonds in the pension savings portfolio grew by 8 percentage points to 46% over 2015, the proportion of shares grew by 6 percentage points to 13%, whereas the contribution of bank deposits was down by 12 percentage points to 19%.
High interest rates on fixed income instruments, cost recovery of financial assets as well as higher percentage of the stock market instruments added to the growth of weighted average portfolio yield of the NPFs' pension assets to 10.8% in 2015 from 4.9% in the previous year.
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