How the pension is formed

For many, the following are quite important questions: how is the pension formed? What kinds of it exist, what does it consist of? What are the advantages and disadvantages of non-state and state pension funds?

Everyone has the moral right to have a full rest, which means that the activity at the enterprise must provide it for the rest of his life. And here we are not talking about the fact that the enterprise itself must provide the citizen - this is done at the expense of the pension fund, in which mandatory contributions are made. In Russia, the accrual, formation and payment of pensions is carried out in accordance with the Federal Law "On Labor Pensions in the Russian Federation". Understanding how a pension is formed, it is worth saying that it can not only be mandatory. It can be supplemented with a voluntary one, that is, use savings accumulated in a non-state pension fund. There are a number of types of compulsory pension, specifically: a working pension for disability, old age, in case of loss of a bread-winner. The labor pension includes three parts: basic, funded and insurance.

Basic part of labor pension

The organizations pay social workers' taxes to state funds. Approximately half of these funds are transferred to the pension fund. These transfers are not nominal, they do not serve as a part of the accumulation contributions, so the funds are used by the fund in order to pay pensions to current pensioners. These payments serve as a basic part of the labor pension and are established in accordance with the level of the subsistence level and budgetary funds, as well as the rates of inflationary growth. The basic part is not affected by the amount of wages and length of service, it can be paid to foreigners or stateless persons who live permanently in the Russian territory.

How the pension is formed: the insurance part

Unlike the basic, the insurance part of the pension is tied to a specific person, its amount is determined depending on the ratio of accumulated contributions to the amount of the expected repayment period. The employer makes contributions to the pension fund in the amount of 8-14% of the taxable amount for each individual employee, and this tax amount includes not only the salary, but also other funds that were spent by the enterprise on the employee.

Accumulative pension

It is calculated in the same way as the insurance part, but instead of the pension capital, the amount of savings is indicated. For each individual person, these savings are indicated in a special part of the personal account. As a distinctive feature of the funded part, it can be called that it is placed on different investment instruments. It can be transferred to all kinds of funds for management purposes, as well as for investing in securities. Each working citizen has the opportunity to independently manage the funded part, you can refuse to cooperate with a certain fund, and transfer the management to another company or fund.

What are the advantages? Everything is clear, the state pension fund is a cumbersome machine, so it takes time to make decisions on the allocation of funds, and the decisions themselves are usually taken in the direction of guaranteed, but very low-yielding instruments. Non-state funds are different in that they make decisions as quickly as possible, offering a wide range of strategies and portfolios for investment. NPFs have just started their activities. The legislative base in this case is not sufficiently developed, and the funds are very young, but in the future they will form the basis of savings for retirement.

So, now it becomes clear how the pension is formed.