According to her, a possible benchmark is considered for three portfolios: aggressive (55% bonds, 45% shares), moderate (80% and 20%) and conservative (100% bonds).

“Our task is to create a model pension market that will lead to higher transparency, among other things”, said Novokreschenyh. She also noted that the project is supported by the National Fund Managers League.

Novokreschenyh also said that MICEX-RTS is planning to draft proposals in the near future for the relevant ministries, including the Ministry for Economic Development, to amend pension insurance legislation.

“There is long money in Russia, it is simply not being invested”, she said, marking the necessity of lifting legal restriction on investment of pension money into the Russian stock market.

Novokreschenyh also told us that the exchange proposes to lift the restriction on pension fund participation in IPOs, augmenting the list of investment instruments for pension funds to include derivatives. Besides, the proposals include higher limits for investment in shares and bonds, abolishing annual reevaluation of assets and implementing the five-year investment cycle, when a private individual is not allowed to transfer savings to a different private pension fund.

‘Strategic Solutions Center’ Fund President Mikhail Dmitriev said at the committee session that the proposals are similar to the Fund proposals drafted with the National Fund Managers League. “The proposals can be implemented quickly, following the government change”, he says.

However, he doubts the feasibility of higher limits for pension fund investment in securities. “I have certain doubts that the private pension funds and managers will be able to fulfill the higher limits. They fall short of the existing limits as it is”, he noted. He thinks that this is due to high volatility in the Russian stock market. “We should probably look into a more internationally diversified portfolio to include foreign assets that are not price related to the Russian market”, Dmitriev says.

Deputy Chairman of Vnesheconombank Sergey Lykov said that the bank supports higher limits for pension fund investment in securities. VEB is the state manager of the Russian Pension Fund. He stated that the pension savings may be used for buying up to 20% of one issue by a particular issuer and up to 30% of all traded bonds by a particular issuer. He mentioned that today VEB remains the single major long-term investor, whose purchase power is taken into account by issuers planning to float bonds. “We propose doubling the limits. In our opinion, the risk will be contained at a safe level”, said Lykov.

Project Group №1