Went from VEB: who will benefit from the flow of pension money into private funds

For the first quarter of the volume of pension savings managed by VEB decreased by 209.1 billion RUB, up 1.8 trillion rubles (2.2% of GDP)

Who got the pension money?

Non-state pension funds (NPF) for the first time surpassed the state management company in terms of pension savings: the results of the first quarter in private funds was almost 2 trillion rubles, and VEB 1,8 trillion rubles this is evidenced by the statements of NPF posted on the website of the Bank of Russia.

For the first quarter of the volume of pension savings managed by VEB decreased by 209.1 billion RUB, up 1.8 trillion rubles (2.2% of GDP). During the same period, the amount of compulsory savings in the NPF increased by 271,5 bn, almost to 2 trillion roubles (2.4% of GDP).

Significant growth in pension savings in the NPF happened as a result of the transition campaign in 2015: 33 NPF included in the guarantee system in 2015, has received 259 billion rubles, is specified in the message of Bank of Russia. This is a savings of citizens, which in 2015 has decided to stop being “the silent ones” and go into private pension funds. According to the FIU, such of 4.09 million people. At the same time to return to the pension Fund wanted only 149,1 thousand people.

In the end of the year, private pension funds recorded the high demand by citizens on the transfer of savings. For example, in the largest volume of savings Fund NPF of Sberbank the number of applications from citizens has increased by half in the last week of 2015. According to the official representative of “KIT Finance NPF” Elena Yamshchikova, in December the number of hits on the website of the Fund has tripled, and the number of appeals to call-center five times. So active citizens ‘ desire to go from the PFR to NPF Advisor to the President of the National Association of pension funds (NAPF) Valery Vinogradov explained the disputes in the government about the fate of the funded part of pension. The catalyst mass desire of citizens to go to the NPF was the refusal of the government to extend the right of choosing the option of pension provision. Wishing to preserve the ability to deduct the contributions to the funded part of the pension had until 31 December 2015 to transfer their savings to private funds or to the Manager or write a statement about your intention to keep the cumulative part of the pension and leave money in the state management company.

By the end of 2015, the largest inflow of funds from new clients has received the NPF of the savings Bank. From statements published on the website of the Central Bank, it follows that in the first quarter net savings of this Fund increased by 85.2 billion rubles, or 35%. Earlier, the head of Sberbank NPF Galina Morozova, told RBC that the Fund for the year crossed 1.4 million customers.

The percentage of all significant was able to increase the volume of funds managed by pension funds of the group BIN. So, NPF “science and Education” compulsory savings increased by 454% (from 696,5 million to 3.9 billion RUB); the European pension Fund by 114% (from 59.2 billion to 127.4 billion RUB); the “Confidence” to 97% (from 32.8 billion to 64.7 billion rubles). Only five funds Mikail Shishkhanov and the brothers Gutseriev European pension Fund, Doverie, SAFMAR (formerly “Raiffeisen”), “Education and science” and Regionfond attracted 1.8 million new customers, said earlier the representative of the retirement group BIN Ekaterina Moiseeva. NPF attracted clients not only through offices and representatives, but also through a network of partnerships Bank (more than ten banks) and reteylovy, added Moses.

Will it be beneficial for seniors?

According to the FIU, at the end of 2015 savings of 49.2 million people were stored in the VEB, another 31 million people in pension funds and 0.5 million people in private management companies. The CEO of NPF VTB Larisa Gorchakovskaya says that the growth of volume of pension accumulation under control of NPF on hand primarily by the citizens. “Reporting system, the NPF is now quite transparent, and the effectiveness of them above. All funds interested in the accounts of their clients grows rapidly, because the yield depends on the level of remuneration of management”, she said.

A direct obligation of pension funds is to save and multiply the money for future retirees. Therefore, the main indicator of the Fund is the investment yield of pension savings. According to the Central Bank, the weighted average yield of pension savings in the NPF from the beginning of 2016 9% per annum, which is higher than inflation the consumer price index during the same period grew by 8.7%. The yield on VEB’s extended portfolio also outpaced inflation and amounted to 11.7% per annum. The highest return was able to show NPF “Oboronno-industrial Fund them. V. V. Livanov” almost 17%. To overtake on the results of the VEB are 19 private funds, ahead of inflation 38 NPF. A negative yield showed only two NPF “the Future” and “the Mechel-Fund”.

By the end of 2015, the yield of the extended portfolio of Vnesheconombank amounted to 13,15% per annum, which is above inflation by 0.25 percentage points to Overtake the web has able 19 NPF, inflation 23 SPC.

However, it is more correct to assess the results of investing pension money on the long horizon. According to the joint research of company Pension and actuarial advice” and the rating Agency RusRating”, in six years (2009 to 2014) cumulative inflation amounted to 58,65%, and the yield of VEB a 44.25%. 21 private Fund managed to outperform inflation, and 37 showed a better result on the web. All analysts analyzed 56 NPF that accounted for 86.3% of all insured persons and 84.6% of retirement savings, the ranking includes 49 of them, so as soon as these funds have information on the yield since 2009.

Trusting the accumulation of private pension funds, future retirees are not at risk too, I am sure chief economist for Russia and CIS “Renaissance Capital” Oleg Kuzmin. “Under the present system of oversight by the Central Bank and guarantee Fund risks are not so significant. The regulator allowed to manage pension savings funds only, included in the guarantee system. In addition, the Bank actively worked to improve the quality of the investment portfolios of pension funds”, he recalls. Gorchakovskaya also noted that funds that invest in risky projects or assets of dubious quality, is gradually withdraw from the market due to the policy of the regulator.

Will the pension money to work on the economy?

“In terms of investment in the economy it does not matter who manages the pension money of VEB, private UK or NPF. But, of course, pension funds are investing more actively in stocks and bonds simply because of the difference in their investment returns. The feasibility of the state managing company essentially already”, says Director for analysis of financial markets and macroeconomics UK “Alfa-Capital” Vladimir Bragin.

According to him, the NPF became a major component of the debt market, including in 2015. “Without the pension money, the bond market and the availability of IPOs for companies would be much more modest,” said Bragin. According to the Agency RAEX, at the end of 2015, almost 60% of pension savings and 39% of pension reserves NPF placed in corporate stocks and bonds. It’s about 1 trillion rubles, or a third of the assets of the whole system of nongovernmental pension provision. However, as noted in the review RAEX “Future of pension market: NPF become strategic investors, pension savings and reserves of these funds amounted to a fifth part of the volume of investments in fixed capital in 2015. “The sectoral structure of investments in fixed capital suggests that the money could provide around 20% of investment in construction, about 10% of the investments in the electricity sector and almost 5% in transport and communication” gives the data of his research analysts RAEX headed by the Director of corporate ratings Veronika Ivanova.

Kuzmin indicates that the amount of 2 trillion rubles. quite significant for the Russian economy. “Total Bank credit to the real sector at the end of 2015 was less than 40 trillion rubles. But this is mainly short-term resources,” he said. According to the expert, the NPF could claim the role of institutions that provide long-term funds for the economy, however, this is prevented by the decision on freezing of pension savings that the government has taken the last few years.

In 2015, private pension funds radically changed their investment Declaration, says Vinogradov of the NAPF. Increased the proportion of investment in the real economy through bonds and infrastructure projects, and decreased the amount of investments in deposits. According to the study RAEX, the absolute amount of pension savings invested in corporate bonds increased almost 2 times from 434,4 to 816,4 billion rubles NPF are ready to invest in the real economy, but they need guarantees of safety of pension money,” says Vinogradov. Today offer high-quality projects is limited, he adds. “In addition, we must remember that investment in infrastructure, the real economy is right and not the obligation of the NPF. Need quality projects and guarantees. The risk must be justified”, said Vinogradov.

Larisa Gorchakovskaya recalled that the government periodically offers funds to projects to which you can direct your retirement money. “This large company, and important infrastructure projects. As a rule, the funds never refuse to support the real sector”, she said.

To go to the pension money?

After authorities in the beginning of 2016, announced a revitalization program of “big privatization”, the question arose about how to conduct it in terms of sanctions and limited access to foreign capital, told RBC a source close to Rosimushchestvu. One option is participation NPF in the privatization of certain assets, indicated two officials of the government. One of the interlocutors of RBC in the government in late April said that the SPF may be invited to participate in the privatization of VTB, ALROSA and “Bashneft”.

Earlier, the government already tried to attract the NPF to invest in the economy. After it became clear that resources of the national welfare Fund is not enough for satisfaction of all applications from companies wishing to implement projects with it, and the volume of budget support is limited, the Ministry of economic development in the middle of 2015 has organized a series of meetings for NPF. They funds offered to invest in bonds of companies that implement infrastructure projects. “We are discussing the funding issues with the companies “Rosneft”, Russian Railways, FGC, AFK “Sistema”, Rostelecom, SIBUR, NOVATEK, Gazprom Neft, inter RAO UES, Tuva energy industrial Corporation, Central exurban passenger company”, told RBC Deputy economic development Minister Nikolai Podguzov.

The officer of the government, RBC says that pension funds already invest more than 50% of its assets in bonds of Russian companies, including in infrastructure projects. For example, the construction of the toll motorway between Moscow and St. Petersburg. “We recently had a meeting in the government on this subject. To say that the pension money is not working in the economy, it is impossible, but the volumes are small compared to the investment of the state,” the official acknowledged. Among the possible projects for the coming years where we need the pension money, he calls the construction of high speed railway Moscow Kazan. According to him, Russian Railways plans to attract the NPF more than 200 billion rubles. more than ten years. “There are still interesting projects with the state participation in agriculture, road construction and energy, but yet there are some issues with their payback, and yet not even VEB is ready to invest”, said the interlocutor of RBC.

Previously RBC reported that private pension funds can provide the right to invest in funds of direct and venture investments and the stocks of technological companies, small and medium capitalization, that is, in risky projects. As reported by RBC in February of this year, to develop the draft law is the Ministry of economic development and the Ministry of Finance with participation of Bank of Russia by June 2016. The representative of the economic development Ministry on Wednesday forwarded a request to RBC at the Central Bank. The source, RBC financial-economic bloc of the government said that the Ministry supports the idea of investment of NPF funds in private equity and venture capital and participation NPF in infrastructure projects. The development meets the relevant recommendations of the Central Bank, said the source.