Choosing a Retirement Option

Until December 31, 2015, citizens born in 1967 and younger must choose a pension option for themselves - leave only the insurance part of the pension and refuse the funded one, or keep both parts of their future pension.

Retirement options

Insurance part is the basic form of state pension provision. The pension is guaranteed, but its size depends on the situation that will be in the country at the beginning of payments, primarily on the ratio of the number of working citizens and pensioners and on the situation with the state budget.

Accumulative part- these are mandatory pension savings funds, which are managed by professional market participants in the interests of the future pensioner.

Combination of accumulative and insurance part allows you to create the most reliable option for pension provision. Such a "combined" pension consists of at least two elements - budgetary and market, which helps to protect potential payments from risks of different nature.

Components of the future pension of Russians

Options for placing the funded part of the pension

How to place your funds?

Features of the calculation of pension savings,

subject to transfer under applications for early transfer

according to applications submitted by insured persons in 2016

Both the Pension Fund of Russia and the non-state pension fund, which is part of the system of guaranteeing the rights of insured persons in the system of compulsory pension insurance, can invest pension savings.

The PFR invests pension savings through the state management company Vnesheconombank and private management companies, one of which a citizen can choose independently.

The insurer can only be changed upon transfer from the Pension Fund of Russia to a non-state pension fund, from one non-state pension fund to another, and also from a non-state pension fund to the Pension Fund of Russia. When transferring pension savings from one management company to another, there is no change of insurer - the Pension Fund of Russia remains it.

You can use the right to change the insurer annually. However, investment income is retained only if the funds are transferred no more than once every five years.

It is also possible to change the insurer by early transition, however, in the event of a negative investment result, this may lead to a decrease in pension savings (nominal insurance premiums) by the amount of investment loss. The exception is insured persons who have submitted an application for an early transition in the year of the five-year fixation of pension savings by the current insurer.

Losses of a citizen's pension savings when applying for an early transition in 2016

Required documents for applying

Insurance certificate of compulsory pension insurance (SNILS) Identity document (passport of a citizen of the Russian Federation) Application for the choice of a management company

WHAT IS THE DIFFERENCE BETWEEN THE INSURANCE AND FUNDING PART?

Both the insurance and funded parts of the pension are formed at the expense of insurance premiums, which are charged by the employer for their employees.

At the same time, contributions to the insurance part are fixed on an individual personal account in the Pension Fund in the form of state-guaranteed pension rights and are regularly indexed by the state. But the money itself is used to pay pensions to current pensioners.

Contributions to the funded part of the pension live a different, more complex financial life. These are real funds that can be transferred to the management of the company, this company will invest in investment projects and thereby increase the amount over time. Instead of a management company, you can choose a non-state pension fund that works with several management companies, monitors the state of a citizen's account, and reduces the risk of losses.

WHERE WILL THE FUNDS OF THE CONDUCTIVE PENSION GO WHEN THE 0% TARIFF IS CHOSEN

All pension savings of citizens formed at that moment will continue to be invested and paid in full, taking into account investment income, when citizens become eligible for retirement and apply for its appointment. The changes will affect future deductions. We are talking only about the redistribution of contributions in favor of the insurance part.

WHICH TARIFF TO CHOOSE: ZERO OR SIX PERCENT?

If we talk about the advantages of choosing 0 or 6 percent, then it is necessary to explain:

The insurance part of the pension is more conservative, more guaranteed by the state, since the funds of the insurance part of the pension are indexed annually depending on the inflation rate and taking into account the income growth index of the Pension Fund per pensioner.

The funded part is more flexible, but less protected by the state. The funded part of the pension accrues investment income, which is received as a result of placing your funds in non-state pension funds or management companies. The 6% tariff is more interesting for insured persons who seek to participate in the formation of their pension savings.

In this case, there is one more plus in the funded part: these funds can be inherited. In the solidarity system, where insurance premiums are located, they are not inherited.

What will be the size of the rate of insurance premiums for the formation of the funded part of the future pension, everyone must decide on their own. If you don't want to think about the fate of your pension savings, do nothing. Then from the new year, all 16% will go to the insurance part, and the state will manage this money. If you want to manage part of the pension money yourself, you are sure that you will be able to do it better - write an application to the Pension Fund of Russia or a non-state pension fund to which you are ready to entrust your savings.

If you have never submitted an application for choosing a management company or for transferring to a non-state pension fund, then in order to maintain the 6% tariff, you should submit an application for choosing a management company or an NPF. At the same time, as before, when transferring pension savings to a non-state pension fund, you need to conclude an appropriate agreement on compulsory pension insurance with the selected NPF.

For those who in previous years at least once submitted an application for choosing a management company or for transferring to an NPF, and it was satisfied, from 2014, 6% of the tariff will continue to be transferred to the funded part of the pension.

I FREQUENTLY HEAR IN THE NEWS THAT NON-STATE PENSION FUNDS ARE CLOSED, AND NO ONE RETURNS THE CONDUCTIVE PENSIONS TO PEOPLE... OR ARE LOSSES REFUNDED?

In case of bankruptcy of non-state pension funds, they are obliged to transfer all available pension savings and customer registries back to FIU within a month. If funds are not available, NPF was not included in the guarantee system - the Bank of Russia reimburses the money for them, but only at the nominal value of insurance premiums (without investment income).

IF AGENTS OF NON-STATE PENSION FUNDS COME HOME AND ASK TO SIGN PENSION TRANSFER DOCUMENTS, SHOULD THEY BE TRUSTED?

Before signing any papers, it would be good to find out who really came to you and what kind of documents you are asked to sign. If a person came to your house without warning and introduced himself as an employee of the Pension Fund, ask him to show his official ID and you will find out that you have a representative non-state pension fund.

If you nevertheless signed the document, and only then read it, then, accordingly, you will look for your pension savings in the non-state pension fund with which you signed the contract without looking.

I would like to remind you once again that employees of the State Pension Fund do not go from house to house, they do not carry out any reconciliations and campaigns, they do not sign any documents.

THE CONDUCTIVE PENSION HAS BEEN FROZEN AGAIN, WHAT DOES IT MEAN?

Talking about freezing pensions is generally wrong. We are talking about the fact that during 2016 the entire amount of insurance premiums goes to the formation of an insurance pension, and the funded pension is not funded. This procedure for the formation of a future pension has been extended for the next year 2017. At the same time, all pension savings that had already been formed at the end of 2013 do not disappear or disappear anywhere. They are invested and will be paid to citizens when they reach retirement age.

HOW TO FIND OUT IN WHICH PENSION FUND THE SAVINGS ARE IN? .

You can find out where your pension savings are located through the personal account of the insured person on the PFR website. In addition, such information can be obtained by personally contacting the client service of the Pension Fund Department at the place of residence.

AS A SUCCESSOR, I INHERITED MY FATHER'S RETIRE SAVINGS. THROUGH WHICH INSTITUTION CAN I RECEIVE THIS PAYMENT?

As explained by Natalya Karnozhitskaya, head of the department for organizing and accounting for the investment process of the Pension Fund of the Russian Federation in the Belgorod Region, since 2008, the successors of the deceased insured person have the right to receive his pension savings.

According to the "Rules for the payment of PFR to the successors of deceased insured persons of pension savings" there are 2 ways to receive them:

Through the post office;

By transferring funds to a bank account.

When the assignee chooses the method of receiving funds through the Russian Post, from the amounts payable, deductions will be made against the postal fee for the implementation of the postal transfer (at established rates). The amount of this deduction is 2% of the payout amount.

If the payment method is chosen “by transferring funds to a bank account”, then the assignee must submit to the territorial body of the PFR, along with all documents, a copy of the savings book or information about the existence of an account with bank details. When disbursed through a credit institution, the funds of pension savings are paid to the assignee in full (without withholding delivery costs).

I note that before the expiration of 6 months from the date of death of the insured person, the successors have the right to change the method of receiving pension savings. To do this, you need to submit an application to the territorial body of the FIU.

From 1.01.14 the Law came into force, according to which changes are introduced regarding the pension contributions of Russians. The document regulates not only the redistribution of amounts to various insurance and funded parts of the labor pension, but also the revision of the current rates of insurance premiums. Let us consider the changes in detail in order to understand how it will be possible to ensure a decent amount of pension payments in the future.

Let's figure out how the insurance and funded parts of the pension differ from each other. Both parts differ from the basic component in that they are not fixed values, but depend on the citizen's salary. The insurance part and the funded part of the pension are calculated based on the survival period (228 months).

The insurance part is guaranteed by the state to every citizen of the Russian Federation. This does not depend on which company will manage the funded part. The deducted amounts are used to pay the amounts to current pensioners.

The accumulative part is intended for storing funds in an individual account that cannot be spent on state needs. The amount of savings depends entirely on the choice of a citizen and his business activity.

The funded part of the labor pension

Employees born in 1967 and younger than them must decide on the method of forming the tariff for the funded part until 12/31/15:

• leave 6%;
• refuse to increase the insurance part of the pension. In the first case, you need to submit an appropriate application to the FIU or NPF before 12/31/15. At the same time, the funds will be returned to the FIU if the NPF ceases to operate for various reasons. If the employee does not want to make contributions to the funded part, then 22% will go to the insurance part, of which: 6% is the solidary part of the tariff, 16% is individual. . In the case of cooperation with a state pension fund and the company managing its assets (Vnesheconombank), annually on August 1, the value of the funded pension is adjusted based on the results of the company's investment activities.

The insurance part of the pension

The insurance part of the labor pension will be calculated according to the new formula only for citizens who will start working for the first time in 2015. For those who have seniority, pension rights in 2014. converted into a new accounting tool - individual pension coefficients. The value of the "annual pension coefficient" is planned to be calculated as the ratio of the amount of contributions paid by the employer for the insurance part, multiplied by 10% (16%), to the amount of contributions from the maximum wage, multiplied by 16%. The resulting value must be multiplied by 10. This coefficient will evaluate the annual labor activity of a person.

16% of the employer's deductions will be directed to the insurance part in case the employee refuses to form the funded part, 10% - in case of applying to the non-state pension fund (NPF). For citizens older than 1967 only the insurance part of the pension will be valid.

The insurance part will be calculated in points based on the length of service, salary level, date of retirement. Only those who scored 30 points will be able to receive social assistance. The minimum length of service, which provides for the payment of an old-age pension, will increase to 15 years. Since 2015 the required length of service must be 6 years, increasing annually. The amount of wages that are subject to insurance premiums will also be increased to 2.3 average wages instead of the current figure of 1.6.

Insurance premium rates in 2014

For most companies, insurance premium rates remained at the level of 2013:

• 22% are deducted to the FIU;
• 5.1% are deducted to the FFOMS;
• 2.9% are deducted to the FSS. From payments in excess of the maximum base value (624 thousand rubles from 2014), contributions are sent only to the PFR (10%) for the insurance part. The base is calculated from the beginning of the year on an accrual basis for each employee.

New calculation of pension

From 2015, a new principle for calculating labor pensions will be introduced in the Russian Federation, which will make it possible to close "pension gaps". It is assumed that newly minted pensioners from 2015 will be able to solve this problem without raising the retirement age, reducing payments or transferring an additional burden to taxpayers.

So the new system is:

• the basic component is a state guarantee of payments for all citizens of the Russian Federation, without exception, upon the onset of a legal age or the corresponding length of service.
• insurance component - this part depends mainly on the conscientiousness of the employer (the amount of contributions paid) and the solvency of the state (economic situation).
• cumulative component - its size is formed on a voluntary and mandatory basis, and depends on the will of the employee.

Basic pension payments will be assigned to the federal budget. Initially, it is tied to the base size with an annual indexation of 1.04. The size of the increase depends on the rise in prices for the consumer basket or on the level of inflation.

You can save pension payments without raising the age bar by indexing payments. It depends on the actual age at retirement. For example, an employee who has not issued a pension on time and continues to work for more than a year will be added to the accrued pension 5.6%, from two years - 12%, from three years - 19% and beyond. It is easy to calculate that having retired 10 years later than it should be, a person will receive an amount greater than 2.11 times.

Non-state pension funds

Why is it important to have time to decide on the choice of NPF before 2015? People who did not apply to the Pension Fund before 01/01/15 will lose 6%, which are currently subject to deduction to the funded part of their labor pension from the employer's contributions. They will be automatically redirected to the insurance part of the pension. Those citizens who have already transferred the funded part to the NPF or have submitted an application for the choice of a management company will not be affected by this procedure.

In conditions when the average return on investments of the state agent of Vnesheconombank is up to 9.9%, and the inflation rate, in turn, reaches 9.7%, it seems inappropriate to promptly transfer your savings to a non-state fund.
It's important to know:

• The state will make pension payments in any case, but their size depends on the person.
• It is possible to increase the future pension several times only with the help of the funded part.
• The fund must be selected taking into account its profitability and reliability rating (A ++ highest degree). You can choose a fund annually (for example, where the percentage per annum is higher).
• When choosing an NPF, you should focus on organizations operating in your region. Sometimes you will have to appear there in person, so a foundation located nearby will be convenient.
• The state is informed about your savings, since at the end of the reporting year, the funds report to the Pension Fund of the Russian Federation on the amount of money earned for depositors.
• Do not forget that state non-budgetary funds (FFMS, PFR) guard the interests of citizens. A positive aspect of the new pension reform is to involve Russians in the fate of their own future through financial control. The ability to choose non-state pension funds will make it possible to reasonably increase pension savings.

In the Russian Federation, there are three types of pensions: old-age insurance, funded and state security. The Federal Law “On Funded Pension” has been in force since the beginning of 2015. From this moment on, working citizens of the country can independently choose the method of forming a future pension and manage pension contributions at their discretion.

insurance pension

First of all, you need to know how a pension is formed. Components of pension provision:

• basic part;
• the insurance part of the pension;
• pension savings.

After 2015, pension provision is assigned subject to a number of conditions that affect the formation of an insurance pension:

• a certain age limit;
• sufficient insurance experience (in 2018, 9 years of experience are required);
• the required amount of points (for 2018, the indicator is set at 13.8 points). This indicator has its own value, set annually.

The amount of the insurance pension

number of pension points × pension point price established for a given period of time + base part (subject to annual indexation).

The insurance part of the pension changes upwards due to later registration, as well as if the pensioner continues to work, thereby increasing the length of service and the total number of pension points.

Attention! When determining the amount of the insurance pension, regional multipliers apply, which are used in different climatic zones.

funded pension

What is a funded pension? This is a type of additional material security formed by pension savings, as well as funds from their investment in investment projects. The creation of an accumulation fund is possible for citizens born after 1967. Pension savings are credited to the personal account of the citizen who has chosen this type of provision. Persons born before 1967 are also entitled to a funded pension, but its formation will be only personal funds.

Pension savings is also available for men born between 1953 and 1966 and for women born between 1957 and 1966. If this group of citizens had deductions in the period from 2002 to 2004, they can use the savings, subject to a number of conditions that give them the right to receive them.

Persons who have only insured under the MPI system (compulsory pension insurance) have the right to choose the method of forming a pension no later than 5 years after the first insurance premium or until they reach the age of 23.

To create savings, you can use the following options:

• 6% of all insurance premiums that each working citizen transfers to the formation of pensions;
• use of personal funds;
• deductions by the employer on account of the savings of his employee;
• state co-financing (when personal contributions are replenished with contributions from the state);
• maternity capital issued for the birth of a second child (in part or in full);
• profit from investing savings.

Management of pension savings

Citizens can, on their own initiative, send pension savings to the FIU or NPF. If the future pensioner has made a choice in favor of the Pension Fund, he will have to decide on the Management Company.

If the choice fell on the NPF, you should study a few points well before entrusting your savings to the fund:

• reliability of NPF. To do this, it is worth studying the data of official rating agencies;
• life of the fund. The earlier the fund was licensed and started its work, the more experience it has in managing cash and increasing it with the help of financial instruments;
• profitability. This criterion will show how successful the fund's investments are. These data are available on the NPF websites;
• co-founders. Well, if these are large and well-known enterprises;
• transparency of work. It’s good if the NPF has a website where all the information about it is provided, starting with a license and ending with a personal account for tracking financial transactions.

NPFs manage savings and invest them in various projects that allow you to receive income from investments. Thus, the amount of pension savings funds grows, which will help increase the amount of payments when they become eligible.

To transfer savings to the NPF, you should write an application to the FIU with a notification of the transfer of funds. The second step will be the conclusion of an agreement with the selected NPF. In such a situation, the State Pension Fund checks the NPF for a license, and if the fund meets all the requirements, the citizen will receive permission to transfer savings.

The insured person has the right to change the NPF. You can do this without financial loss once every 5 years. If the NPF's license is revoked, the savings will be returned to the accounts of citizens in the FIU. However, this does not take into account the profit from investing savings.

Important! The management company is allowed to change every year without the risk of losing investment profits.

Ways to receive a funded pension

Withdrawal of funds accumulated on the individual account of a future pensioner is possible in several ways:

• one-time payment;
• urgent payments in the form of monthly payments;
• lifetime payments;
• inheritance.

Lump sum payment

You can claim pension savings in full in the form of a one-time payment under certain conditions:

• if a citizen is entitled to social pension payments by age (assigned to citizens without seniority or with insufficient seniority);
• if a person has been assigned a disability benefit or in connection with the loss of a breadwinner;
• if the amount of the funded part of the pension is less than 5% of the amount of the insurance part.

The return of the funded part of the pension in the form of a lump-sum payment is possible within 60 days after receiving a positive response on the appointment.

Urgent payments

It is possible to use the funded part of the pension in the form of urgent payments. They are due to citizens whose funded pension was formed as follows:

• personal funds;
• due to extraordinary contributions from the employer;
• under the co-financing program;
• part of the capital funds.

Claiming payments is possible after the establishment of an old-age pension. The period during which payments are made is set by the pensioner independently. But the Law decided that the term of urgent payments should be at least 10 years.

Standard lifetime benefits

The right to receive savings arises after a citizen leaves for a well-deserved rest (including early). This is a payment that is accrued along with the basic pension. Its size is determined by the amount of funds contained in the pensioner's savings fund at the time of payment.

When calculating the funded pension, the expected payment period is taken into account, which is determined annually by legal acts. In 2018, this indicator is determined for a period of 246 months. It is possible to reduce the estimated period of payments due to a later application for savings from the savings fund. However, this figure can only be reduced to 168 months.

Calculation of the funded part of the pension:

• for the calculation, a mathematical formula is used - the monthly amount of the funded pension = the total amount of funds on the personal account of the pensioner / the expected period of payments;
• citizen S. has an accumulation fund in the amount of 340,000 rubles. The expected payment period in 2018 is 246 months. At the same time, the citizen applied for payments 2 years later after the right to receive them arose. Thus, the estimated payment period will decrease by 24 months and will be equal to 222 months;
• using the formula, we get the size of the funded pension for citizen S. - 340000/222 = 1531 rubles. This is the monthly amount that the pensioner will receive the entire period of survival.

Documents for processing payments

To assign payments, you should contact the PFR or NPF (depending on where the funded part of the pension is contained) with a written application. The application indicates the applicant's personal data, including registration and citizenship, SNILS, data on assigned pension payments, a list of documents that are provided along with the application, as well as data necessary for crediting funds.

In addition, you will need the following papers:

• employment history;
• certificate from the Pension Fund of the Russian Federation on the assigned pension payments;
• documents confirming the status of a disabled person or the applicant's right to benefits in case of loss of a breadwinner;
• documentation that determines the right to early retirement (work with difficult working conditions, living and working in the regions of the Far North and areas equated with the Arctic, attribution to the indigenous peoples of the North).

Inheritance of pension savings

The funds available to a citizen as pension savings can be transferred to the inheritance fund, provided that the owner of the savings did not use them before death.

The accumulative fund is inherited by the successors specified in the will or application. In the absence of documents identifying heirs, the funds are transferred to citizens who are entitled to receive them by law. In the absence of a will, the savings not received by the pensioner are paid to successors in equal installments.

If a citizen dies before the establishment of payments from the funded part of the pension, the successors are entitled to all the funds available on the account of the deceased. In the event of the death of a working pensioner who made contributions to the savings fund with personal funds, relatives can lay claim to this money (except for the part assigned for payment).

In the event of the death of a woman who formed savings with the help of mother capital, only the spouse of the deceased, minor children and children under 23 years old who are full-time students can inherit the savings.

Payment Methods

Pension savings can be received in the following ways (except for receiving by inheritance):

• by Russian post by personal appeal or at home through an employee of the organization;
• by transferring funds to a personal account in a bank or at the cash desks of a credit institution;
• through a delivery service.

The issuance of funds occurs after the presentation of documents proving the identity of the recipient. If it is impossible to personally receive funds, this can be done by the legal representative of the person entitled to payments, if there is a power of attorney drawn up in accordance with all the rules and notarized.

Disadvantages of a funded pension

To make the right choice between insurance and funded pensions, you should know what are their differences:

• contributions to the insurance pension are calculated in points and are an information indicator involved in the calculation of pension provision. At the same time, funds are spent by the state on the maintenance of pensioners;
• pension savings are collected on the citizen's personal account in monetary terms, they can only be managed by the account owner;
• the insurance part of the pension is subject to annual indexation, and the funded part can only increase through investment and subject to the profitability of the project;
• savings are inherited by legal successors in the event of the death of their owner;
• the formation of an accumulative fund at the expense of 6% of mandatory contributions affects the insurance part of the provision, reducing the number of accrued pension points;
• there is an opportunity to refrain from further formation of savings. In this case, the available funds will remain in the citizen's account. Savings will continue to work as an investment and generate income for its owner.

After the pension reform in 2015, the funded part of the labor pension became an independent form - the funded pension. Until December 31, 2015 years to citizens born in 1967 and younger one could choose: or refuse to deduct contributions to it. If a citizen has chosen the option with the accumulation of funds, then he can transfer them to the Pension Fund of the Russian Federation by choosing the Management Company (MC) or transfer pension savings to (NPF).

You can receive funded pension payments only when you reach 60 years for men and 55 years for women, or the age that allows you to apply for an old-age insurance pension, taking into account the standards in force on December 31, 2018 (that is, without taking into account the changes introduced).

Since the retirement age is being raised, and the age standards for funded pensions have remained “frozen”, it turns out that a citizen can receive pension savings before retirement.

Funded pension - what is it?

The funded pension is formed from citizens, born in 1967 and later, which began to work before January 1, 2014 and until December 31, 2015 decided to direct contributions to the funded pension.

Citizens older than 1967 can also form pension savings, but.

The formation of pension savings occurs due to the transfer of insurance premiums by the employer. In total, the employer pays 22% from wages in the form of an insurance premium, of which 16% is directed to the insurance pension and the solidarity part, and the remaining 6% transferred to the funded pension.

In addition to mandatory insurance contributions, pension savings can be formed through:

• voluntarily paid insurance premiums;
• amounts contributed under the pension savings co-financing program;
• maternity capital funds fully or partially directed to the formation of a pension;
• results of investment of accumulated funds.

How to find out the amount of pension savings (via the Internet, according to SNILS, in the Pension Fund)

Until 2013, information on the state of the ILS, including on the amount of pension savings, the PFR annually sent out to insured persons by mail in letters. Currently, depending on where the funded pension is formed in the PFR or NPF, this information can be obtained in different ways:

• Via the Internet on the website of the PFR or NPF using a personal account.
• In the territorial pension fund with the provision of a passport and SNILS.
• When contacting the branch of the NPF, which the citizen has chosen to form savings.
• Through the bank in which the citizen has an account, if this bank provides such a service.

The amount of pension savings of the insured person

The amount of the funded pension of the insured person is affected by the amount of funds contributed to its formation and accounted for on his individual personal account (ILS) in the Pension Fund of the Russian Federation or on his pension account in the NPF.

The amount of pension savings annually based on the amount of funds received for its financing, which were not taken into account in the calculation at the time of appointment or in the previous adjustment.

The calculation of the funded payment is made according to the formula:

NP = PN / T,

• NP- the size of the funded pension;
• Mon - the amount of the recipient's pension savings on the day the payment is made;
• T— expected period of pension payment (number of months). It is established annually by law and in 2018 is 246 months.

Once every five years NPF can be exchanged for another, or the formation of funds can be transferred to the UK. It is possible to do this earlier (early) - once a year, which may result in loss of investment income.

• Contact the NPF and conclude an agreement on compulsory pension insurance with it.
• Submit an application to the territorial FIU for transfer to the NPF.

After considering the application, the pension fund sends a notification to the insured person. If the non-state pension fund complies with the legal requirements, the FIU will notify of a positive decision, if the license of the fund is revoked, the reasons for the refusal will be reported in the notification.

How to get the funded part of the pension?

Previously (2014 and 2015), it was proposed to people engaged in labor activity to choose how their future pension will be formed - only insurance pension or insurance and funded. True, the right to choose was granted only to citizens who were born no earlier than 1967.

If you have already agreed that the money goes to two types of pensions - both insurance and funded, then you need to remember that you can cancel your decision. You can do this at any time and all contributions (6%) will go only to the insurance pension.

For employees for whom the employer started paying contributions only from 01/01/2014, the right to choose the method of forming a future pension is presented within 5 years from the moment the company first accrues contributions.

Benefits of an insurance pension

When you make your choice, it is worth remembering that the state guarantees an annual increase (indexation) of the insurance pension. And the funds allocated for the funded pension are invested by NPFs in financial markets. And here there can be both a significant income and losses. As a result, you will retain only the amount of paid insurance premiums. It won't index itself.

The number of pension points also depends on which pension you choose - insurance or funded. When choosing only the insurance pension, you can count on the maximum number of points - 10. If you agree to the option - insurance pension plus funded, you can only accumulate 6.25 points.

Benefits of a funded pension

The main advantage of a funded pension is that your future pension is not “dead weight”, but works and can generate income in the future.

In addition, the funded pension can be inherited, and insurance savings in the event of the death of a pensioner will be distributed among other pensioners.

Retirement savings will belong exclusively to you exactly in the amount that you were able to form by the time you retire. And the size of the insurance pension may depend, among other things, on the number of pensioners in the country.