The funded component of pension provision is understood as the total amount of funds received from employer contributions and income from its investment. Benefits traditionally begin to be paid when a person reaches the age limit to receive monthly support. However, this is the only type of benefit that can be received into a personal account before retirement age, if such a need arises.
This is not the only feature associated with this type of payment. If other types of savings are managed by the Pension Fund of Russia or Vneshtorgbank, then the funded component of the salary may be in the hands of any unofficial bank or management company that the citizen chooses.
“The current pension system is structured in such a way that 22% of an employee’s official income must be transferred by his employer to the Pension Fund. 16% goes to the creation and development of the insurance component, and 6% is transferred to the created savings account.”
However, there is another option when citizens can completely abandon the savings component by directing all contributions to an insurance account.
What are the conditions for paying the funded component in 2018?
For the current year, persons who have crossed the established age threshold have the right to claim a cumulative component of monthly maintenance, which is stated in the second article of the legislative act numbered 360-FZ, issued on November 30, 2011.
Savings can be received in one of the following options:
- A one-time payment when all savings are withdrawn;
- Monthly emergency benefits;
- Funded pension;
- A one-time payment of all savings to entities specified in the owner's will if he dies.
A legal option for receiving savings before retirement age is having a disability of any category. Also, the fourth article of the Federal Law, number 360-FZ, states that the reason for receiving all accumulated funds ahead of schedule may be the untimely loss of a breadwinner. The amount of payment is limited only by the amount of savings in the personal account on the day the lump sum benefit is assigned.
It is worth knowing that working pensioners do not have the right to claim a one-time receipt of their savings until they leave their official place of work.
The amount of the funded part of the pension
There are some doubts about whether to transfer the funded part of the pension to the insurance one, when there are so many cases of non-state pension funds being closed.
But, if pension contributions were registered for investment in a non-state pension fund, the citizen has the right to apply for the formation of a pension upon reaching a certain age.
Several types of deadlines for payments are provided by law:
- No payment deadline. Monthly compensation for life, the amount is determined based on the expected terms. They, in turn, take into account the average life expectancy according to statistical data in the country;
- Urgently. The insured person has the right to set the period for this part of the pension, but not more than 10 years.
- One-time allowance. This payment has a number of conditions.
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What is the lump sum payment in 2021?
A fairly strong influence on the volume of benefits is exerted by the policy pursued by a state or non-state fund, in which a citizen stores a cumulative share of his future pension benefits.
“If we consider the State Pension Fund of the Russian Federation, then most one-time benefits range from five to fifteen thousand rubles. Amounts exceeding twenty thousand rubles are not considered by this organization.”
Non-state management companies may work according to a different scheme, so such a boundary may reach a different level. Many funds allow you to withdraw the entire amount of savings if a corresponding application is received.
The total amount of savings to date can be found out in several ways. The first option is to find the necessary accounting department of the organization in which the subject worked. This is convenient only if a person worked for a long time in one company, where all data on contributions transferred to the Pension Fund or other organization should be stored.
It is important to know that such an appeal is legal, therefore the employer is obliged to satisfy the request for information about the citizen’s personal data. The second option, of course, is to contact the appropriate fund where the savings are stored.
Insurance and funded part of pension 2021
The standard (insurance) part of the pension is indexed by the state and is formed from payments from organizations in which the person worked; this is called an insurance pension.
It is paid from the pension fund and the personal account of the future pensioner; previously this type of transfer was considered a labor payment.
The amount of allowance is fixed, it is a kind of guarantor of the citizen and an obligation to the state, and changes annually taking into account inflationary changes in the country.
If the minimum payment amount is not enough, part of the funds is supplemented from the federal treasury to the citizen’s account in the pension fund, if the length of work exceeds five years.
Changing the amount of payments is possible for persons upon reaching the age of 80, as well as for a certain category of citizens (disabled persons, official guardians of incapacitated persons).
This all concerns the area of pension subsidies; the basic insurance and funded part of the pension plays an important role.
Recently, in Russia, a pension investment system has been introduced, such as a funded one, consisting of monthly six% contributions to the Pension Fund.
All citizens have the opportunity to dispose of a certain part of their pension savings at their own discretion, placing them at the disposal of a private pension fund.
Important: The insurance and funded part of the 2018 pension, in addition to obvious advantages, fundamentally has pitfalls. There are risks of such investments in non-state pension funds. When choosing, you need to take into account many aspects, including the reputation of the NPF and official accreditation.
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What is a fixed-term pension payment?
This is a type of monthly benefit that is assigned to the subject during the time period when he was insured. It is important to take into account the fact that the insurance period can be ten years or more.
You can claim such content if two conditions are met:
- A citizen must reach the established age limit, which for the current year is 55 years for the female part of the population and 60 years for the male part;
- The pensioner must finish his working career.
If there is some reason that allows you to issue an early exit to legal rest, then urgent benefits are also issued earlier than the threshold established in the country for the majority of residents of the Russian Federation.
Term pension provision is provided to those entities that have registered in a special co-financing program. The following options are possible:
- Personal transfer of additional funds to a retirement savings account;
- Transfer of additional funds from the employer for whom the employee worked;
- Additional charges from the state resulting from investment income;
- Transfer of financial resources or part thereof from maternity capital accrued by the state;
- Transfer of additional income received as a result of profitable investment of accumulated savings in other projects.
If the funded component was created in one of the above ways, then a subject who has passed the age limit or reached it ahead of schedule has the right to apply for pension savings in two options:
- Monthly urgent payment for a period of time determined by the drive itself, but the law does not allow setting a time interval of less than ten years;
- Monthly maintenance payable until death.
If, in the event of the untimely death of a pensioner, part of the funds remains in his account, then it is due to the person or persons whose names are indicated in the will of the accumulator.
In situations where part of the funds is formed from maternity capital received from the state, as well as when the mother herself dies, the child’s father, or the child himself, can claim the remaining amount if he has not reached the age of majority or is a full-time student under 23 years of age.
How is a funded pension calculated?
You can calculate the monthly benefit amount using a special formula established by one of the existing legislative acts:
Monthly allowance = RN/P.
Explanation:
- RN - the amount of accumulated funds in the personal account on the day from which monthly payments begin to arrive;
- P is the estimated period during which all savings will be paid.
“Before 2021, the expected period for payments was considered to be 228 months or 19 years. In such questions, the average life expectancy in the country is taken into account. For 2021, the terms are different - it is 20.5 years or 246 months, respectively.”
Naturally, when choosing urgent payments, the time period differs at the request of the citizen himself.
For a better understanding, it wouldn’t hurt to look at a specific example:
Let's take an average Russian resident, whom we'll call Fedor Petrovich. On the day the subject reaches the age threshold, there are 350,000 rubles in the subject’s personal account. The country's estimated period during which funds must be disbursed is equivalent to 246 months. It would not be out of place to mention the fact that the estimated period will likely be subject to adjustment every year, as well as other indicators, including age limit, scores and experience.
Let's go back to the example. In the event that Fyodor Petrovich wishes to continue his work activity after reaching the required age over the next year, then the expected period changes. From the established 246 months, 12 months are subtracted when the pensioner works. Accordingly, according to this scheme, you can calculate the amount for any period.
If Fyodor Petrovich retires on time, the monthly allowance will be less. It will be 1495 rubles. If retirement is delayed by one year, then the subject will receive 1,576 rubles per month. However, deferment also has its limits. The maximum period allowed today is 60 months. Then the estimated period for making payments becomes 174 months, which is a total of 14.5 years.
Freezing pension savings
A significant decrease in budget revenues due to the economic crisis forced the government to decide to optimize budget expenditures, including freezing the transfer of pension savings to third-party non-state pension funds (NPFs) with expected savings of billions of rubles. As today, the funded part of the pension in 2021 is directed only to the insurance pension.
The state promises that it is not expected that this form of savings will be abolished, that all accumulated funds after unfreezing will not only return to the accounts of the NPF, but will also be indexed. Now, according to the decision taken to extend the measure until 2021, all funds from the personal accounts of compulsory pension insurance continue to serve as a source only of the insurance pension. Does this indicate the end of the pension savings system?
The Ministry of Finance has made proposals for reforms of the pension system, which also affect savings, which are proposed to be formed on a conditionally voluntary basis. Persons wishing to receive funded pension contributions will themselves send part of their salary to the NPF, and funds transferred by employers will be sent only to the PF budget for the insurance part. According to experts, internal economic processes against the backdrop of external sanctions indicate the likelihood of a long freezing of NPF funds until the state finds other sources of budget replenishment.
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What is necessary to receive the funded component of a pension?
The procedure is quite simple if you follow the established rules. The subject must visit the management company chosen by him to accumulate financial resources.
All information about finding savings can be obtained by contacting the regional department of the Pension Fund of the Russian Federation. An alternative to this option is to visit the official website of the State Services.
If a citizen keeps his savings in an official source represented by the Pension Fund, then he must contact the local branch of the Pension Fund.
There is no need to appear in person to apply because you can submit your request by mail. This function was created specifically for those who cannot visit the department due to health reasons, namely the ability to move independently.
It is also possible to submit an application from the legal representative of the pensioner, who personally visits the relevant institution.
What documentation is required to process this type of payment?
- Original passport of the person applying to receive funds;
- A well-formatted application;
- SNILS.
This is the required minimum only for the savings part. But in situations where the insurance component is also drawn up, a more complete package of documents will be required, including:
- The corresponding application, filled out according to the sample;
- Work book or other additional documentation containing information about work activity and the period during which it took place.
The submitted application is reviewed within ten calendar days, and after that the sender is informed of the results that satisfy and reject the corresponding request for a pension salary.
Both types of monthly allowance are paid at the same time. There are no strict deadlines for filing an application, so the citizen himself decides when to apply. The most common option, of course, is when you reach the required age.
If a pensioner dies and there is no will, then the order of inheritance is as follows:
- The citizen's wife or his children;
- In the absence of the former, the right of inheritance is transferred to other relatives. First of all, these are the brothers or sisters of the deceased.
Design features and innovations in 2021
As it was, a funded pension in 2021 can be created by persons born no earlier than 1967. For other citizens, this will be possible if they become participants in state projects. co-financing. They will need to annually deposit an amount from 2,000 to 12,000 rubles into their personal pension account. These funds will be doubled using budget resources. The rate of 22%, paid by the employer, can be divided: 16% for distribution to the Pension Fund for the insurance part and 6% for distribution at the individual discretion (insurance, savings share).
The savings part is formed in a personalized manner and this is its main advantage over the insurance part. Funds are assigned to a specific person and are given the opportunity to invest them profitably. As a result, savings accumulate and are used to supplement the basic pension payments. Under the solidarity system, today's pensioners are provided with payments that are not related to future pension accruals of a particular payer.
The current legislative norms define the procedures for obtaining the funded component. The first step is to find out where the deductions are accumulated. Information will be provided by territorial multifunctional centers (MFCs), PF branches, or can be found on the government services website. Documents required:
- confirming insurance experience;
- passport;
- statement;
- SNILS;
- application for the insurance part of the pension (with simultaneous registration of both parts).
Within ten days, having accepted the documents for consideration, the Pension Fund makes a decision. If approved, both parts are paid simultaneously, but in 2021 the formation of the funded part of the pension remains limited. By Presidential Decision No. 413-FZ of December 20, 2017, the moratorium was extended until 2021. The amendments were adopted by the State Duma and approved by the Federation Council. The document enters into force on January 1, 2018.
What has changed in the accrual of the funded share in 2018?
According to official data from the Pension Fund of the Russian Federation, there have been no significant changes this year, so the procedure remains the same. Changes took place only three years ago, when the process of formation and accumulation of this share was frozen. The same ruling has been in effect ever since, preventing the existing program from operating at full capacity.
The only key change for the current year is that working pensioners must decide whether to continue working or take advantage of the right to take legal leave and receive monthly benefits.
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