Non-state Pension Funds industry reform
Non-state Pension Funds industry reform
Duma Passes Non-State Pension Fund Corporatization Law
23.12.2013 12:38 / PRIME
Deadlines
According to the bill, by 1 January 2016, not-for-profit NPFs acting as insurers in compulsory pension insurance schemes are to be reorganized into share pension funds. From 1 January 2014, NPF reorganization is allowed only by takeover, reorganization into share pension funds and spin-off.
From 1 January 2016 onwards, NPFs are banned from acting as insurers in compulsory pension insurance. By 1 January 2019, NPFs not acting as insurers in compulsory pension insurance, are to be reorganized into share pension funds or liquidated.
Not-for-profit non-state pension funds, authorized by the Bank of Russia to perform reorganization by split-up or spin-off by 1 January 2014, are to finalize reorganization by 1 July 2014.
Share NPFs
Offshore companies cannot be NPF shareholders.
NPF must earmark at least 85% income from pension reserve placement and pension savings investment for replenishment of pension reserves and pension savings.
The reserve fund, other own NPF funds and dividend payments may be sourced only from income generated by the NPF in its principal activity.
Funds are to create compulsory pension insurance reserves from income generated by pension savings investment in the reporting year (if such income is insufficient or null — from own funds), pension savings not claimed by successors of deceased pension policy holders, income from fund reserves and other assets investment.
Starting from 1 January 2018, compulsory pension insurance fund reserves are set at a minimum of 1% and a maximum of 10% of the base as of 31 December.
A fund’s minimum charter capital is RUB 120mn, and a minimum RUB 150mn from 1 January 2020.
Funds are not allowed to pass share dividend payment decisions until 5 years have elapsed since the date of its state incorporation.
CB Control
The bill clarifies CB powers of NPF control and oversight, licensing procedure, charter capital structure, dividend payment. Procedures for actuarial valuation and reorganization audit are also established.
According to the bill, the Central Bank may employ auditors and actuaries for the audit of non-state pension funds joining the pension savings guarantee system.
Acquisition of over 10% of an NPF requires Central Bank approval.