As part of the mandatory pension insurance program, a contribution (22% of the salary) is withheld from each employed citizen. But today there are alternative options to save up for your old age – without the participation of the state. Some save money during their working life, others participate in investment projects, and still others entrust financial assets to insurance companies (insurance companies) and NPFs (non-state pension funds), whose task is to increase savings by the time they go on a “well-deserved rest”. Consider the nuances and features of voluntary pension insurance.
How the program works
Voluntary pension insurance is a program that helps to achieve the following goals:
- Accumulate capital for old age.
- Increase the size of the labor pension paid by the state.
- Invest financial assets in the development and economy of the country.
On the side of the insurers are NPFs and companies that have the appropriate license. Counterparties can be not only ordinary citizens, but also individual entrepreneurs, legal entities.
Categories such as voluntary pension insurance and seniority are interconnected for self-employed clients. They are exempted from the need to make contributions to the formation of social benefits from the state. To accumulate pension experience, this category of insurers has the right to deduct money “for old age” at their own request.
Understanding how voluntary pension insurance works is easy. Due to regular deductions from beneficiaries, a fund is formed, the funds from which are directly transferred to recipients when they reach retirement age. Until the expiration date of the agreement, the money placed on the NPF deposit is invested in highly profitable projects, which ensures the capitalization of financial assets (real estate, precious metals, securities, etc.). The list of investment instruments is approved at the government level.
By the end of the reporting period (fiscal year), an audit is scheduled, as a result of which the fact of the targeted use of contributions is confirmed (or not confirmed). The audit function is entrusted to the authorized executive body.
As part of voluntary pension insurance, the client has the right to independently choose programs in which such parameters as the amount of contributions, the frequency of depositing funds, the list of risks, etc., are differentiated.
The amount of the pension depends on the gender and age of the insured, the duration of the contract and the amount of contributions.
Consider the main parameters of voluntary pension insurance.
The client has the right to deposit a large amount at a time or start forming a second pension from scratch. Tariffs may have a minimum payment.
Frequency of payments
It is fixed in the pension plan when the client is obliged to make insurance contributions. The frequency can be monthly, quarterly or yearly.
It determines the time period during which the client undertakes to transfer money to the fund. There is no need to make payments before reaching retirement age: you can, for example, save up for a second pension in 15 years, and go on a “well-deserved rest” after 25 years.
The right to receive a second pension arises after a person can officially apply for a state pension. The insured has the right to provide for a later retirement of the second pension than provided for in the NPF plan. In this case, the terms of the agreement do not change – it is enough to write a statement about the desire to receive an additional pension.
The payment period can be both fixed-term and indefinite. In the first case, a time period is selected in advance, during which the client plans to receive an additional payment (5, 10, 15 years, etc.). Depending on the period, the amount of contributions is adjusted. If the beneficiary dies early, his pension is inherited.
If the insured wants to receive money from the fund indefinitely, then they are paid by analogy with the state pension. To calculate contributions, the NPF divides the accumulated reserve by the potential life expectancy (in months), which is determined based on information from Rosstat. In the event of an indefinite payment, the inheritance procedure is not provided.
Profitability of NPF
This parameter determines how much the NPF will add to fixed payments. Profitability is not known to anyone in advance, and it changes annually. In some cases, a non-profit structure can invest “in the red”, and then the loss caused to the client is compensated by the NPF reserve.
If you cancel the program ahead of time
For clients, the question of whether it is possible to refuse voluntary pension insurance by early terminating the contract with the NPF does not lose its relevance. Such a possibility is formally provided for when the NPF practices the correction of the pension scheme during the accumulation period. In this case, the client is obliged to compensate for the losses and pay the insurer a fine. After the cancellation of the contract, the beneficiary is paid the redemption amount, which is less than the amount of payments made.
How to choose an NPF
Before entrusting savings to a non-state structure or SC, it is necessary to make sure of its reliability. Analyze whether the fund is integrated into the system of guaranteeing the rights of insured persons. If yes, then you can not worry about the safety of your own money. Additionally, check the credit rating of the structure (it must be at least class A).
Another indicator is the period of operation of the fund (company) in the insurance market. Trust financial assets to those structures that have been operating for at least 10 years. The business reputation of an NPF can also be judged by the number of clients it serves (if there are less than 1 million, then the commercial structure is new to the market). You also need to analyze the profitability of the fund over the past years. The client can always change the non-state pension fund if a competitor offers more favorable terms.
Since 2023, the format of voluntary insurance has been connected to the system of guaranteeing the rights of participants in voluntary pension insurance. It will be administered by the DIA (Deposit Insurance Agency). Initially, this structure protected financial assets on the principle of co-financing. But now a client who has entrusted his savings to NPFs is entitled to receive compensation in the amount of 1.4 million rubles if the structure goes bankrupt or loses its license.
Another guarantee for the client is as follows: in the event of a disease with a high probability of death or disability (until the end of the contract), the obligation to pay contributions passes to the NPF. Upon receipt of a disability (1st or 2nd group), the beneficiary is exempt from payments and receives the accumulated funds by the date specified in the agreement. A number of funds practice doubling or tripling investments in situations where, for example, a client dies as a result of a traffic accident.
Some insurers offer corporate voluntary pension insurance programs. They allow you to pay contributions in equal shares with the employer (50/50). But before switching to such a format, it is necessary to obtain consent from the company’s management. The employer has the right to refuse the corporate program.
The voluntary pension insurance program has pluses and minuses. For clients, it is attractive because:
- allows you to receive a tax deduction (up to 120 thousand rubles);
- exempts from the need to pay fixed contributions in case of illness or disability;
- allows you to choose a program depending on the period of accumulation, the amount and frequency of payment of contributions;
- allows you to transfer the second pension by inheritance (if the beneficiary died before the end of the agreement);
- allows you to receive a second pension, regardless of the accumulated length of service.
The program aimed at accumulating an additional pension is not without its shortcomings. These include:
a low percentage of profitability;
the presence of commissions (the client has to pay for the services of not only the insurance company or NPF, but also the management company);
the risk of cancellation of the contract in case of late payment of the contribution (with partial reimbursement of accumulated funds).
Thanks to the voluntary system of accumulating pensions, it is possible to improve the financial situation in old age. When choosing an insurer, you need to pay attention to its reliability, business reputation and credit rating.