The procedure for transferring from one NPF to another: how to change NPF without losses

Some citizens who belong to the working population today have an individual account or pension savings. They allow you to invest a certain part of insurance premiums (but since 2014, such contributions have been frozen and you can invest what you have accumulated in the account before, or what you or your employer voluntarily invest), thereby increasing the size of your future pension. It is not the system participant himself who invests the money, but the Pension Fund or Non-State Pension Fund. And, unfortunately, this activity is not always profitable. Therefore, a natural question may arise about how to make the transition from one non-state pension fund to another. We'll talk about this today.

What is NPF and why is it needed?

Since 2002, private (non-state) pension funds have been participants in the pension fund. A person who has an individual account can choose where to send the money:

• leave it in the Pension Fund (then investment is carried out by management companies at the direction of the Pension Fund);
• transfer them to NPF.

If the owner of pension savings has not declared the transfer to a non-state pension fund, then their investment is handled by the only state management company - Vnesheconombank. The “Extended” investment portfolio was also automatically assigned.

If a person decides to invest his pension savings in a non-state pension fund, he can choose the appropriate company himself. Moreover, a person can optionally:

• transfer from NPF to Pension Fund and back (no more than once a year);
• change NPF to another;
• choose a different investment portfolio.

However, in order not to suffer losses, you need to know about some of the nuances and methods of transferring from one NPF to another.

I'll have to run

It is now impossible to do this, as before, in one stage - simply by coming to the selected NPF and writing an application (or even not going anywhere, but acting through an agent representative of the fund).

“Since 2014, the procedure for choosing an insurer for compulsory pension insurance, through which pension savings are formed, has really changed. The procedure for submitting an application has become different,” the Pension Fund reported.

Who is in charge of the savings?

Let us remind you that the law provides for three options for managing pension savings:

savings can be left under state management, and then the state manager, VEB, will invest them;

the future pensioner has the right to choose a private management company (PMC);

You can also direct your savings to one of the non-state pension funds.

The first option is suitable for people who completely rely on the state to formulate a pension. They do not follow what is happening in the financial market, do not know how to manage money, and have no idea what investment income is.

The second option is for the active and financially savvy. A person himself chooses a private investor, monitors profitability, and decides to move to another company (or non-state pension fund) if his manager shows poor results.

The third option is intermediate. On the one hand, a person wants to use non-state investment instruments to get more income. On the other hand, he doesn’t want to get bogged down in financial issues. He enters into an agreement with a non-state pension fund, and his money is managed by fund specialists.

How money moves

In the first two cases, the insurer is the Russian Pension Fund. He transfers your savings either to VEB or to PUC according to your application - wherever you want. If you did not submit such an order to the Pension Fund, then by default the savings are transferred to VEB and invested in an expanded portfolio. It is precisely such citizens who are called “silent”.

In the third case, the savings are managed by a non-state pension fund, and it decides which management company it will use.

How does the money transfer work?

Until this year, it was possible to submit an application to select a non-state pension fund directly from the fund, as well as through its agents. Let's remember how insurance companies work: few of us insure our car in the office. But when the next deadline approaches, calls from insurance agents begin, vying with each other offering to extend the insurance. So NPFs acted in the same way - they recruited “walkers” who were ready to visit enterprises, explain the advantages of the work of non-state funds and conclude contracts on the spot.

Then the following happened: the NPF transferred data on such applications to the Pension Fund of the Russian Federation, and this was a “command” for the citizen’s money to be transferred to the non-state fund of his choice. This entire procedure was enshrined in law.

But at the same time, in recent years, the Pension Fund has received complaints from citizens who discovered that their money had been transferred to a non-state pension fund without their knowledge. Either the statements were false, or the agents did not explain the entire procedure to people in a way that made everything clear. Many NPFs have introduced additional control over the work of their agents. But although the conflicts have become fewer, they have not stopped completely. As a result, the government decided to abolish this system altogether.

“The changes are caused by ongoing complaints from citizens from year to year about the unlawful transfer of their pension savings to NPFs,” explains the Russian Pension Fund. “Non-state funds are required to transfer only verified and reliable information to the Pension Fund.” In reality, statements with forged signatures were used. There were also documents that duplicated each other.

How does it work now

From January 1, 2014, you can submit an application for choosing an NPF only to the Pension Fund of Russia - this can be done at any customer service. In this case, as before, you first need to conclude an agreement with the selected non-state fund.

This procedure will cut off unscrupulous agents (their services are now simply not needed). But at the same time, the procedure for transferring savings to NPFs is becoming more complicated; it has become a two-step process.

1) first you need to conclude an agreement with the selected NPF;

2) having come with this agreement to the client service of the Pension Fund of Russia, personally confirm the choice made by writing a statement.

It is clear that the order has become more complicated for people. Migrant workers have questions. Many people leave their region in search of work and do not have permanent registration in the city where they get a job. “So, now, in order to manage my savings, I will have to fly home to Khabarovsk, my place of permanent registration, and go to my Pension Fund branch?” — an employee of one of the Moscow companies asked RG with this question.

The Pension Fund reassured us: it is not at all necessary to contact the branch at your place of permanent residence. The application must be accepted in any division of the fund that has a customer service.

The new order is promised to be softened

In addition, the Pension Fund clarified that in 2014 it is planned to somewhat soften the current strict scheme. We are now preparing to approve and introduce a procedure for transferring pension savings for citizens from one NPF to another NPF and to the Pension Fund. With the introduction of the new procedure, a new form of transfer agency agreement will be developed for non-state pension funds, which they will be able to conclude with the Pension Fund of the Russian Federation. It is planned that the new order will be something like this:

1) if you are already a client of a non-state pension fund and decide to change your NPF to another, in this case you can submit an application not only to the Pension Fund, but also to your current NPF. Example: let’s say you decide to transfer your savings from NPF A to NPF B. To do this, you first enter into an agreement on compulsory pension insurance with NPF B, after which you go to either the Pension Fund of the Russian Federation or NPF A and submit an application to transfer your pension savings to NPF B. Applications submitted through NPF B will not be accepted by the Pension Fund for consideration.

2) if you are a client of an NPF and want to return your savings to the Pension Fund, then the application can be written either to your NPF or to any client service of the Pension Fund, regardless of the citizen’s place of permanent residence.

“The procedure when an application is submitted through the Pension Fund or a “disinterested” NPF completely eliminates the possibility of unlawful transfer of pension savings,” the Pension Fund believes.

Why is it worth changing NPF?

NPFs invest pension savings of citizens. The level of their profitability depends on how correct these investments were. This indicator is the main factor when choosing a non-state pension fund. In general, a person may decide to switch to another fund for the following reasons:

• the company suffers losses or profits are very small;
• there are NPFs with higher returns;
• loss of confidence in your NPF.

There is no need to be afraid that all your savings will burn out. The system is designed in such a way that invested funds cannot be burned, since they are subject to compulsory insurance. This applies to pension savings, voluntary contributions by the employee and the employer. Moreover, NPFs are required to record investment income every 5 years. What does it mean? That the results from investment activities during this period will be recorded, therefore, the “fireproof amount” will increase.

Actions of the Pension Fund of the Russian Federation

The Pension Fund of the Russian Federation, having received an application for transfer (early transfer) from one NPF to another, can:

• satisfy the application;

• refuse the application;

• leave the application without consideration.

For reasons for refusal, see the table.

The Pension Fund of the Russian Federation must notify the person and both NPFs (previous and newly selected) about the decision made. The deadline for this is 31 March of the year following the year in which the application was made.

This procedure follows from paragraphs 6 and 7 of paragraph 5 of Article 36.4 of the Law of May 7, 1998 No. 75-FZ.

Situation: what to do if the Pension Fund of the Russian Federation unlawfully refused (left without consideration) an application for transfer from one non-state pension fund to another?

File a complaint with the branch of the Pension Fund of the Russian Federation that refused to satisfy the application (leaving it without consideration), or with a higher division of the Pension Fund of the Russian Federation (Articles 2 and 8 of the Law of May 2, 2006 No. 59-FZ).

You can file a complaint:

• on paper;

• electronic.

This is stated in paragraph 1 of Article 4 of the Law of May 2, 2006 No. 59-FZ.

Regardless of the method of filing a complaint, state the current situation and give your arguments.

When filing a complaint electronically, be sure to include the following:

• your last name, first name and patronymic (if any);

• your postal or email address (depending on which of the specified addresses you want to receive a response to).

Please attach to your complaint:

• an application for transfer (early transfer) from one NPF to another, which was submitted to the Pension Fund of the Russian Federation;

• notification of refusal to satisfy the application (about leaving the application without consideration), which was sent by the Pension Fund of the Russian Federation;

• other supporting documents and materials if necessary.

When filing a complaint on paper, attach these documents as copies.

If the complaint is submitted electronically, submit the documents:

• in electronic form along with the complaint;

• separately on paper in the form of copies or originals.

This procedure is established in Article 7 of the Law of May 2, 2006 No. 59-FZ.

The Pension Fund of the Russian Federation is obliged to respond within 30 days from the date of registration of a person’s written request. In exceptional cases, the period may be extended by no more than 30 days with notification to the citizen who sent the request. This procedure is provided for in paragraph 3.1 of the Instruction, approved by Resolution of the Pension Fund Board of November 2, 2007 No. 275p, Article 12 of the Law of May 2, 2006 No. 59-FZ. In addition, the Pension Fund, based on the results of consideration of the appeal, must take measures if the applicant’s rights have been violated (clause 1 of Article 10 of the Law of May 2, 2006 No. 59-FZ).

Situation: what to do if the Pension Fund of the Russian Federation did not notify a person about the decision he made on an application to transfer from one non-state pension fund to another?

To find out the reason why the Russian Pension Fund did not notify a person of its decision, contact the fund with a request in writing or electronically.

The Pension Fund of the Russian Federation must notify the person and both non-state pension funds (previous and newly selected) about the decision made.

The deadline for this is 31 March of the year following the year in which the application was made.

This procedure follows from paragraphs 6 and 7 of paragraph 5 of Article 36.4 of the Law of May 7, 1998 No. 75-FZ.

The Pension Fund of the Russian Federation may not notify the person about the decision made on the application, for example, if:

• the application was not received by the Pension Fund of the Russian Federation;

• the applicant’s data is incorrect (it is unknown to whom and where to send notifications);

• The sent notification was lost in transit.

To find out the reason why the Pension Fund of the Russian Federation did not notify a person of its decision, contact him with a request in writing or electronically.

In your request, state the current situation and attach copies of:

– an application for transfer (early transfer) from one NPF to another, which was submitted to the Pension Fund of the Russian Federation;

– receipts for the transfer of documents to the Pension Fund of the Russian Federation.

This follows from Articles 2 and 7 of the Law of May 2, 2006 No. 59-FZ.

The Pension Fund of the Russian Federation is obliged to respond within 30 days from the date of registration of a person’s written request. In exceptional cases, the period may be extended by no more than 30 days with notification to the citizen who sent the request. This procedure is provided for in paragraph 3.1 of the Instruction, approved by Resolution of the Pension Fund Board of November 2, 2007 No. 275p, Article 12 of the Law of May 2, 2006 No. 59-FZ. In addition, the Pension Fund, based on the results of consideration of the appeal, must take measures if the applicant’s rights have been violated (clause 1 of Article 10 of the Law of May 2, 2006 No. 59-FZ).

In addition, a person has the right to submit a request to the NPF (previous or newly selected, as well as both at once). Perhaps the Pension Fund of the Russian Federation provided the necessary information to his (their) address. This follows from paragraph 7 of paragraph 4 of Article 36.4 of the Law of May 7, 1998 No. 75-FZ.

The non-state pension fund will respond to the request within the time limits established by its internal rules. The legislation does not stipulate the period of time during which the NPF must respond to requests from citizens.

How to choose a new NPF?

You should not make hasty decisions and change NPFs after the first loss. Unfortunately, investments even in reliable investment instruments may turn out to be unprofitable, and no one is immune from this. If the activities of the management company do not suit the investor, he must choose a worthy replacement before transferring funds. To do this, proceed as follows:

1. Study the conditions for investing in licensed non-state pension funds. Today there are 28 organizations listed in the corresponding register of the Central Bank of the Russian Federation. Be sure to make sure that your pension will be insured. It can be done .
2. Compare the level of profitability in different organizations for at least the last 2–3 years. This information is also publicly available on the website of the Central Bank of the Russian Federation. When making comparisons, it is better to take into account the profitability after paying commissions to the management company, since the amount of this fee may differ for different NPFs.
3. Look at other indicators. You can compare the level of NPF assets, the number of participants in the system, and the total amount of entrusted pension savings.
4. Learn more about managers. It is worth giving preference to reliable organizations. If the NPF is a subsidiary of a well-known bank or large corporation, this is a good sign.

The indicators of investment activity of NPFs for 12 months of 2021 and the first quarter of 2021 have now been published on the website of the Central Bank of the Russian Federation. The TOP 5 in terms of investment profitability minus commissions includes:

Therefore, if you want to change NPF, you should consider these options first.

Mass statements

In any case, the decision to transfer funds is up to the citizen.

However, in 2016-2017, the PFR office in the Altai Territory began to receive large numbers of applications from citizens. People reported that they did not enter into an agreement on compulsory pension insurance with the new fund and did not sign an application for the transfer of pension savings.

How did this turn out to be possible - after all, in order to transfer savings, a citizen needs to sign an application himself? There are several options here, and all of them, as they say, are on the verge of fraud.

Now there are more than 4.3 trillion rubles in the savings system, belonging to 76 million Russians.

MTR

Transition options

There are several options for changing NPF. When choosing, you must take into account the need to do it urgently. There can be 2 options:

• early transition;
• urgent transition.

Each of them has its own pros and cons. The most important thing is to assess possible losses, because this will directly affect the amount of funds transferred to the new NPF.

Remember that the first recording of investment income occurred in 2015, even if before that the funds were kept in the NPF longer. The “freeze” after this date is counted from the moment of transition to the new NPF. It turns out that those who changed their NPF in 2021, when moving to another NPF in 2021, lost their savings for 2021, 2018 and 2021.

Example. In the current NPF, Vissarionov recorded investment income in 2021 along with investments in the amount of 45,000 rubles. In 2019, the management company made a profit in the amount of 3,000 rubles, and in 2021 – losses in the amount of 2,500 rubles. Total income for the period was 500 rubles. What is the best thing for Vissarionov to do? There are several options here:

• Immediately switch to a new NPF. Then the money will be transferred in the amount of 45,000 rubles, investment income will not be transferred to him.
• Wait for a new commit. Then it will be possible to switch to a non-state pension fund only in 2023, but the entire payment amount will remain the same, including investment income.

Setting a period of 5 years in this case is inappropriate, because then instead of 3 years you will have to wait 5.

Example. Voitko moved to another NPF in 2021 and had 64,000 rubles in his account. Investments were unprofitable in 2021, 2021 and 2021. The losses amounted to 1,500, 500 and 2,500 rubles. respectively. Therefore, the total amount of loss is RUB 4,500. Voitko wants to change the NPF. How can he do this better? The options are:

• Transfer investments ahead of schedule. But then the loss will be deducted from the fixed amount, i.e. instead of 64,000 rubles. He will transfer only 59,500 rubles to the new NPF.
• Wait for a new commit. And if the investment income does not turn out to be positive for all 5 years, then the fixation amount will remain at the level of 64,000 rubles.

If a non-state pension fund invests money and suffers losses, then it is better to wait until the end of 5 years, otherwise you can lose even more.

Transfer from NPF

A future pensioner can change the NPF to another NPF or Pension Fund once a year. Having chosen a suitable fund, a citizen must submit an application to the Pension Fund or a multifunctional center.

There are two types of applications:

• about transition (first type);
• about early transfer (second type).

The first type of application involves transferring money after a five-year period. That is, in 2021, those whose money ended up in the NPF in 2015 can transfer their savings to another NPF without loss of income.

If a person is not ready to wait 5 years, an “early” application is suitable for him. You will still have to wait, but not that long. The waiting period will be only a few months. In this case, investment income will be lost, but the applicant will consciously take this step, knowing all the consequences.

Within one day, the submitted application will be sent to the fund with which the agreement was concluded, as well as to the new NPF. Thus, the system of interdepartmental interaction helps the applicant to obtain the most complete information about all the risks associated with this operation. If the applicant decides to transfer funds to a state fund, one application will be sufficient.

To change an insurer, a citizen will need the following documents:

• SNILS;
• passport;
• representative's passport and power of attorney certified by a notary (if the application is submitted through a third party).

The application can also be submitted through State Services. But only those who have a strengthened qualified electronic signature can do this.

Transition procedure: where to go?

There are no difficulties in transferring your savings from one NPF to another. To do this, you need to go to the branch of the future NPF with a passport and SNILS. Many funds also provide the ability to submit documents directly on their website. When registering, you will need to sign the following documents:

• consent to the processing of personal data;
• OPS agreement (3 copies);
• application for transfer from one NPF to another.

On the PFR website, you can only submit an application for transferring savings from one management company to another (only if you have an electronic digital signature, otherwise you will have to go to the PFR branch in person), and you need to apply for a transfer to a non-state pension fund directly through your future company.

Until January 1, 2021, it was also possible to submit documents through the MFC. But after the introduction of Federal Law No. 269-FZ of July 29, 2021, this service became unavailable.

Read: Pension co-financing program in 2021

How to change NPF?

The picture shows the page of the State Services Internet portal, where you can find out which pension fund your savings are in:

If the funds of the funded part of the future pensioner are in a non-state pension fund, the profitability of which is not high or equal to zero, then you can take advantage of the opportunity provided by Russian legislation to change the insurer.

The application must be submitted to the Pension Fund of the Russian Federation and the selected non-state pension fund. The application form depends on the chosen transfer method (urgent or early). With an urgent transfer option, savings will be transferred to the NPF after 5 years from the date of concluding the previous agreement with the NPF.

When choosing an early transfer, savings are transferred to the NPF chosen by the applicant next year after submitting an application to the appropriate fund, if the application was submitted later than March 1 of the current year. For example, in the case where the application was submitted on June 1, 2018, therefore, the funds will be transferred to the NPF from January 1, 2021.

It is best to choose your future non-state pension fund from the list of funds included in the system for guaranteeing the safety of pension savings. This list can be found on the website of the Bank of Russia, as well as the website of the Pension Fund of the Russian Federation pfrf.ru. Among them there are familiar names: Sberbank of Russia, Lukoil-Garant, VTB, AvtoVAZ, etc.

Time to think

The new amendments to the law include three key changes.

Firstly, when applying for a transfer of savings, the client will be informed of the amount of investment income that he loses when switching funds.

Secondly, the Russian Pension Fund will inform both the old and the new fund about the fact of filing an application for transfer. Representatives of the previous fund will be able to contact the client and clarify whether he understands the consequences of the transition, as well as remind him of the loss of investment income.

Thirdly, the citizen will have the opportunity to think. He must submit an application for transfer before December 1. And until December 31 of the same year, he has the right to refuse his decision; to do this, he must submit to the Pension Fund a notice of refusal to change the fund. In case of refusal, the savings will remain in the previous fund.

Kirill Pronin, director of the collective investment and trust management department of the Bank of Russia (quote from TagilCity news agency):

To protect future retirees, they decided to make the pension fund system transparent. The new rules will reduce the number of illegal transfers and loss of investment income. This way, everyone will have the opportunity to weigh the pros and cons and make an informed choice.