Conflicts with management companies force non-state pension funds to create their own risk management units. Only the largest non-state pension funds can afford this, so the market is facing a new wave of consolidation.
Losses shown in 2008 from the placement of pension funds by management companies (according to Expert RA estimates - up to -25% for pension reserves and up to -20% for pension savings) led to a series of lawsuits between NPFs and management companies regarding the minimum guaranteed profitability (MGD) and safety of funds.
At the same time, in lawsuits Only a small proportion of disagreements resulted: the majority of market participants preferred to reach an agreement. However, the results of 2008 will affect the relationship between management companies and non-state pension funds: since in the end it is the funds that bear obligations to depositors and insured persons, they will have to take on some of the risk management functions themselves.
Negotiation path
The expansion of the investment declaration on pension reserves makes the negotiating position of NPFs in the issue of regulation of relations stronger: pension funds make up about a third of the trust management market and serve as an important source of income for management companies. Thus, funds will be able to reduce their risks associated with possible overly aggressive actions of management companies in the market, securing additional conditions in the agreement, for example, by limiting the list of issuers into which funds can be placed. “In our opinion, such an instrument allows the non-state pension fund to improve the quality of management credit risk, since in this case the fund will be able to independently control the placement of funds and cut off potentially risky securities,” Chairman of the Board of NPF LUKOIL-GARANT Alexander Zhirkov shares his experience.
Another option for monitoring the management company on the part of the fund is regular meetings with NPF representatives adjusting the manager’s investment strategy. “We regularly hold meetings of the Investment Committee together with representatives of management companies,” says Executive Director NPF "Telecom-Soyuz" Anton Ostrovsky. - This allows online monitoring, analysis and control of risks arising in the process of placing pension reserves and investing pension savings, as well as increase the sustainability of the fund.”
The described options for monitoring the actions of management companies will be ineffective without creating a high-quality risk management system within the funds themselves. However, the creation of a high-quality risk management system capable of quickly monitoring and responding to changes in the economy is only possible within the framework of large funds. A pension fund with a small business and a low volume of property to support statutory activities (IOUD) simply cannot afford to ensure the functioning of such a system. The prospects for small NPFs are also aggravated by the need to compensate for losses from the placement of pension funds received in 2008.
Elimination game
According to Expert RA, as of 10/01/09, the majority of non-state pension funds have recovered losses caused by the crisis, however, there is a gap between the profitability of placing funds and the income accrued over the same period to individual accounts of investors (the average profitability for three years was only 5. 5% for pension reserves and 4.19% for pension savings). The need to compensate for this gap will not allow funds to fully divert the current year's profits to their needs. This will limit the ability of NPFs to finance their activities, including the development and improvement of risk management systems necessary to control the activities of management companies.
Against the backdrop of a reduction in corporate pension programs (according to Expert RA, pension contributions have decreased by 30% on average in the market), small funds will not be able to cover losses and at the same time organize risk management systems, and therefore will be forced to leave the market. At best, merging with larger players, and at worst, with a missing “hole” between liabilities and assets and a revoked license. “The current restrictions imposed on the minimum level of IOUD are too soft,” says Svetlana Kasina, executive director of the National Non-State Pension Fund. - In conditions of absence investment income, funds need at least 300-500 million rubles to ensure smooth functioning.” A similar position is shared by Alexander Zhirkov from NPF LUKOIL-GARANT: “According to our estimates, the independent development of a non-state pension fund - namely independent development, which does not occur at the expense of the founders' funds - is possible if there is an amount of pension savings and pension reserves of 1 billion. dollars. This size of business allows, without risking the funds of participants and insured persons, to develop and maintain regional infrastructure and improve the quality of customer service.”
During 2010-2011 under the pressure of the changed rules of the game, 25% - 35% of participants may leave the market, but at the same time, market consolidation around large funds will be a step towards improving the quality of risk management, and therefore an important step towards increasing the reliability of the system and protecting the interests of future pensioners.
Income Conservatives
In the wake of the fight against risks, the conservatism of NPF investment portfolios is growing. If there were no fundamental changes in the structure of pension reserves in 2009, then the structure of pension savings underwent significant changes precisely in this year due to the growing share of instruments with fixed income and relatively low risk - such as Money on bank accounts and subfederal bonds (see inset).
Throughout 2010, the structure of NPF investment portfolios will most likely remain as conservative as it is now. At the same time, the range of instruments used by the funds will most likely be expanded to include infrastructure bonds. On the one hand, the launch of such securities into circulation is promoted by the largest market players and issuers, on the other hand, funds are in dire need of long and reliable securities. “Research shows that the return on infrastructure projects is higher than the return on stocks. Thus, investments in American infrastructure made it possible to obtain an average annual return on investment of about 12.8% per annum compared to 9.2% per annum for investments in the US stock market for the period from 1997 to 2007, says Yuri Sizov, deputy general director Management Company "Leader" on strategic issues. “At the same time, investments in infrastructure projects are less volatile, since in times of crisis the demand for infrastructure services in most cases decreases significantly less than in other areas.”
Insertion
In 2009, the conservatism of the structure of pension savings increased significantly. So, if at the end of 2008, according to Expert RA, deposits in commercial banks and money in current accounts accounted for no more than 9% of pension savings, then as of 10/01/09 the share of such instruments exceeded 16%. Another trend that has emerged in the pension savings market is the increase in the share of subfederal bonds, which is due to their relatively high yield at actual low risks against the background of broad financial support from the federal authorities of the regions.
Not a single non-state Pension Fund could not outperform the expanded portfolio of VEB in terms of profitability over the past five years, except for the NPF Soglasie-OPS (since December 6, it was merged with the NPF Neftegarant, the majority shareholder of which should be the Rossium concern), follows from the annual review of the NPF for 2017 and the beginning of 2018. The profitability, which is accrued directly to client accounts, for VEB’s expanded portfolio was 48.8%, and for the Soglasie-OPS fund - 49.37%.
When preparing the report, the period 2013-2017 was chosen, since it was during this time that funds had to disclose for the first time in IFRS reporting the profitability accrued to client accounts, explains the author of the report, leading analyst at Pension and Actuarial Consultations Evgeniy Biezbardis. “Previously, cleared returns were published voluntarily. Due to the disclosure, the accumulated data on some funds had to be updated,” he notes.
Leaders and Outsiders
Cumulative inflation over five years was 44.62%. Only 12 non-state pension funds were able to save their clients’ pension money from rising prices. From major players These included NPF VTB (46.13%), Khanty-Mansiysk NPF (45.85%) and NPF Neftegarant (45.07%). But NPF Gazfond (44.6%) and NPF Sberbank(41.9%) failed to outpace inflation.
The outsiders in terms of profitability were funds that had problems due to investing in the assets of Moscow Ring banks and in structures associated with the owners, says Yuri Nogin, director of the ACRA group of financial institution ratings. . Thus, the lowest yield is for the funds of the “Future” group, which previously belonged to Boris Mints, who left for London. NPF Future earned only 14.26% for clients, NPF Telecom-Soyuz - 25.07%. Low profitability was shown by NPF Safmar (32.9%) and funds that went for reorganization together with FC Otkrytie in August 2017 - NPF Lukoil-garant(33.67%), NPF RGS (35.56%), NPF Electric Power Industry (36.45%).
The press service of NPF Safmar explained the low profitability by the focus of the investment portfolio on the shares of the largest private banks, which were sanitized. “Also, the shares of Sberbank and VTB gave mixed results,” the fund said. Now NPF is focusing on bonds. The press service of Sberbank NPF noted that the fund is pursuing a conservative investment policy with the goal of primarily ensuring the safety of pension savings, and plans to compensate for the lag behind inflation in the next two years. NPF Future declined to comment; other low-yield funds did not respond to Forbes’ request.
It should be remembered that in 2014 there was huge inflation, and the fact that some funds were able to outpace inflation is more likely an accident than a pattern, says Pavel Mitrofanov, managing director of the Expert RA agency. “Some successfully invested in foreign currency, while others simply had successful assets,” he says.
According to Biezbardis, in last years individual funds significantly increased their assets due to the massive attraction of clients and the merger of other non-state pension funds. It has become more difficult for them to fit into the stock market, in which the role of the state and dependence on the cost of energy resources are increasingly growing. Also, after the 2014 crisis, a number of funds realized the risk of related investments in friendly structures.
2019 also poses significant risks for NPFs - the macroeconomy is not as predictable as we would like, and the geopolitical background is not very favorable, says Biezbardis. Now, in his opinion, funds need to focus on reformatting investment portfolios taking into account accelerating inflation and growth interest rates.
State success
VEB's leadership in profitability is due to several reasons. First, funds that significantly increase their client base following a transition campaign may perform comparatively weaker than those that lose clients, says Biezbardis.
“Income from investment is earned throughout the year, but in the case of donor funds, which include the Pension Fund, it is distributed at the end of the year to fewer accounts than at the beginning of the reporting period. At the same time, VEB manages the vast majority of the state fund’s assets. The change of non-state pension funds and VEB occurs once a year, usually at the end of the first quarter,” says the analyst.
Secondly, last year was successful in terms of investing in government bonds, and funds with a conservative strategy showed the best results, notes Biezbardis. Although at two previous years, as pension asset indices show, it was possible to earn more in stocks, he adds.
VEB's leading position means that the portfolio of government securities turned out to be more effective than high-quality corporate bonds. This speaks of the immaturity of Russian stock market, on which a risk-free instrument shows the highest profitability, says Pavel Mitrofanov. « The tendency of funds to buy OFZs increased after the Central Bank’s stress tests, during which OFZs turned out to be the most effective securities to pass them,” says the analyst.
According to him, the number of high-quality issuers in the market is decreasing - companies are increasingly going to banks for borrowed funds rather than the stock market, since due to large OFZ auctions, which are held at a large premium, the cost of raising debt capital has increased. “But we hope that the Ministry of Finance will suspend active placements of increased rate, which will restore the public debt market,” adds Mitrofanov.
Outsiders in terms of profitability are now clearing their balance sheets, and they will need another year and a half to restore their position in the market, Nogin believes. “But this recovery will largely depend on the law on individual pension capital and its configuration,” the expert concluded.
The most interesting question is the success of the NPF Soglasie-OPS, says Nogin. “In my understanding, this is a fund that is associated with the Moscow Commercial Bank, and could be among the players actively investing in bonds of Moscow Ring banks. However, he showed good profitability and was not noticed in problems,” the expert comments.
Each non-state pension fund in its activities is often faced with the uncertainty of the occurrence of a number of events, including obtaining the desired financial results. At the same time, there are risks fail to fulfill the obligations assumed by the fund to pay pensions. NPF risks caused by financial, economic, demographic and other factors can be interpreted as the likelihood of non-fulfillment of pension obligations. In other words, based on our definition, the fund faces the risk of becoming financially unstable. What are the risks of NPFs?
The risks of non-state pension funds can be classified different ways according to various criteria. Since the goal of an actuary is to provide an actuarial balance between actuarial assets and actuarial liabilities (liabilities), for analysis financial stability Based on actuarial approaches, the risks of non-state pension funds are conveniently and most naturally divided into two groups:
- - risks of actuarial liabilities - risks of incorrect assessment and formation of fund liabilities;
- - risks of actuarial assets - risks that assets will be less than calculated values.
Towards risks first group concerns first of all risk of estimation errors(calculations) existing pension obligations. It appears due to the use of incorrect formulas and calculation algorithms, errors in the development of computer calculation programs, errors in source data (for example, in the information provided on the date of birth and gender of participants), incorrect setting of actuarial assumptions (actuarial returns and life expectancy tables) when making calculations etc.
In these cases, you can get an incorrect impression (either underestimated or overestimated) about the fund's existing liabilities.
This group can also include risk of formation errorsnew obligations when accruing investment income to pension accounts, when indexing pensions, etc. In these cases, for example, an unreasonable overstatement of the fund's liabilities may occur, violating the actuarial balance.
In the first group, we linked the risk of estimation errors and the risk of forming obligations, since incorrect calculation of existing obligations in the future, as a rule, leads to errors in the formation of new obligations.
Towards risks second group relate primarily investment risks. First of all, they include the risk of not receiving a given (desired) return investing. Under unfavorable circumstances, there may even be risks of losses when investing. What consequences can this lead to? Firstly, the fund’s direct obligations regarding the return on accruals to pension accounts may not be met. Secondly, even if the fund does not have direct obligations regarding the accrual return, it is advisable to ensure that this return is not lower than the inflation rate, since only in this case will it not decrease purchasing power pensions. Thirdly, the yield may be lower than the actuarial yield accepted in calculating liabilities. In all these cases, the financial balance of the fund may be disrupted.
In addition to the risk of not receiving a given return, there are downside risks current liquidity investment portfolio, which may affect the fund’s solvency when paying pensions and redemption amounts.
In addition to investment risks, the risks of the second group also include risks of non-receipt pension contributions
depositor. From a financial sustainability perspective, this is particularly dangerous when using under-funded pension schemes.
Since there are risks of setting profitability (risks of the first group) and risks of not receiving a given profitability (second group), we can talk about relative risk deviations of investment profitability from the value accepted in actuarial calculations. IN general case What we care about is the relative risk of changes in assets versus liabilities.
Speaking about financial stability, we assessed the possibility of meeting the fund's pension obligations, which are determined by pension schemes. Let's consider various pension schemes from the point of view of financial stability.
Today, due to difficult economic situation in the country, the majority of middle-aged people no longer have much hope for what they can do to provide them with a decent old age.
It is in pursuit of social guarantees that many Russians transfer their savings to NPFs - non-state Pension Funds. What kind of structure is this? What bonuses and, most importantly, risks exist when transferring your savings to a non-state Pension Fund? Let's try to figure it out.
Most pensioners are distrustful of non-state pension funds
Non-state Pension Funds are organizations that manage the funded portions of the pensions of citizens who apply to them, namely, those that invest the proceeds in state corporations, securities or bank deposits and thus multiplying the savings of their investors.
As a rule, NPFs can offer everyone interested in their services more favorable interest rates by deposits. It is not surprising that many see in non-state funds, first of all, an opportunity to become richer through the right investment and, as a result, ensure a more dignified old age. But is it safe to invest in non-state pension funds?
Absolutely safe! From a legal point of view, the non-state Pension Fund is an absolutely legal structure under the direct control of the government. For an ordinary citizen, this state of affairs is a 100% guarantee of the safety of cash savings in the event of their transfer to a non-state pension fund.
Even if for some reason the company itself is liquidated, all funds in its accounts will be preserved thanks to insurance and will then simply be transferred back to the state Pension Fund.
Is it worth switching to a non-state Pension Fund?
Whether to join a non-state pension fund or not is a difficult question
In order to confidently answer the question of whether it is worth transferring your savings to a non-state pension fund, you need to understand exactly how social payments are formed, due to citizens after ?
As is known, when officially employed, some part of the monthly wages employee is automatically transferred to the Pension Fund. It is these regularly deducted amounts that form pension savings.
All funds received in this way are divided into three parts. These are the basic, insurance and funded parts of the pension. For the first two parts the rate is social benefits for members of state and non-state Pension funds is identical (6% and 14% respectively).
However, when it comes to the latter, the situation changes radically. As a rule, NPFs offer a 6% rate on this payment, versus 2% in the State Pension Fund, which naturally attracts potential investors.
Of course, there are other arguments in favor of transferring to non-state Pension funds:
- Non-state pension funds form the funded part of pensions not only from deductions from the wages of investors, but also by investing funds. Consequently, by making the transition to a non-state Pension Fund, in the future you can get much greater “profit”.
- A special insurance program, valid for all non-state pension funds, allows investors not to be afraid of possible "" and, as a result, hungry old age in the event of unsuccessful investments of their money. All funds lost in this way are compensated to pensioners from the organization’s own reserves.
- Investment plans of any NPF are constantly adjusted in accordance with the current situation on economic market. This means that the probability of losing expected income as a result of improper investment of pension savings for each individual investor tends to zero
Are there any risks when switching to a non-state pension fund?
Joining a non-state pension fund carries small risks, but they exist...
Compared to the obvious benefits of transferring to a non-state Pension Fund, the risks that may be encountered during or after this procedure appear minimal. However, one cannot fail to mention them.
Because of world economy is developing extremely unpredictably, when joining a non-state pension fund it is impossible to be absolutely sure of the specific amount of profit on pension savings even for the current calendar year. Simply put, by turning to a non-state fund, a future pensioner loses confidence in the stability of his income.
Since joining a non-state pension fund is a purely voluntary matter, a potential investor will have to independently analyze all the offers presented on this market and personally choose the legal structure that offers the most suitable deposit conditions for him.
In the event that a future pensioner for some reason decides to change one non-state fund to another (we are talking about any situations, including, for example, those when the license of the organization currently serving him was revoked), all costs for this procedure will fall on him shoulders.
Summarizing all of the above, we can come to the following conclusion: transfer of pension savings to non-state funds in itself is a fairly profitable enterprise, not without, however, a certain degree of risk. This option is ideal for those who are concerned about their future well-being and want to save more money to a dignified old age, with a minimum of effort.
For those who are accustomed to personally managing their savings, independent investing in securities and (or other methods of investing pension capital, of which there are quite a few today), will be more attractive. In short, each potential investor has the right to resolve this issue individually according to his personal beliefs.
How can you legally register a transfer to a non-state pension fund?
It is difficult for pensioners to understand all the intricacies of the pension system on their own.
As practice shows, many future pensioners are held back from switching to non-state pension funds by the banal fear of getting involved in unnecessary bureaucratic procedures. However, in reality, changing a pension fund is not as difficult as it might seem at first. In order to transfer to a pre-selected non-state pension fund, it will be enough to write a simple application.
However, let's not get ahead of ourselves. Let's consider how the process of transition from a state Pension Fund to a non-state one occurs, step by step:
The last item on the list is worth dwelling on in a little more detail. Many citizens are interested in the question: how and where to apply Required documents to the State Pension Fund? Do you have to do this in person?
In fact, in addition to personally appearing at the Pension Fund office (with you in in this case You will need to have a Russian passport, and also), you can send an application through the MFC system or even by mail. In the latter case, the future pensioner will have to use a special service called forwarding registered letters with attachment and notification.
In order not to have to worry about the safety of the documents attached to the application, at any of the mentioned institutions you can ask an employee about their receipt. In the event that papers are sent by mail, instead of the original passport and SNILS, it is allowed to put photocopies of them in the envelope.
This is important to know: a citizen’s transfer to a non-state pension fund can be considered officially realized only after the future pensioner receives the corresponding one from the state Pension Fund.
State or non-state pension fund? This video will help you make your choice:
Non-state pension funds currently occupy a significant place not only in the system of non-state pension provision(NGO), but also mandatory pension insurance(OPS). At the same time, the main source of growth for non-state pension funds was the mandatory pension insurance segment. According to ExpertRa, in 2011 the volume of savings managed by non-state pension funds increased 2.5 times from 155 billion rubles. to 393 billion rubles, which amounted to 36% of the pension market, and the size of the client base increased by 4 million people (an increase of 51.8%) and reached 11.87 million people. According to the forecast of Expert RA, by the end of 2012, in terms of volume, the OPS segment will catch up with NPOs, and the private property of non-state pension funds will increase by 20% and exceed 1.4 trillion. rubles
The peculiarities of the activities of NPFs are such that some of its aspects cannot be strictly regulated within the framework of legislation, in particular due to the non-state nature of these organizations. Characteristic feature NPFs have a very long period of cooperation with insured persons and participants, which involves planning activities in conditions of uncertainty and dependence on many factors. This uncertainty allows for a purely probabilistic approach to planning. It follows from this that the activities of non-state pension funds are characterized by a number of non-standard risks that only Insurance companies, but acquiring for NPFs, as non-profit organizations, a certain originality.
Thus, in view of the undeniable social significance of non-state pension funds and their vital role in the pension system, special importance should be given to the financial stability of the funds, protecting the interests of participants and insured persons, and the factor of guarantees and ensuring reliability should have the highest priority.
The presence of a significant number of risks in the pension system is one of the reasons limiting the development of non-state pension funds in Russia. This fact, in turn, affects the efficiency of using the potential of non-state pension funds. Because by attracting long-term investment resources into the economy and using them to the fullest, non-state pension funds could play an even more prominent role in the country’s financial market and become one of the factors in its stabilization and development.
All potential risks that NPFs may face can be classified into two groups. Firstly, non-state pension funds are exposed to internal risks, which are directly related to the effectiveness of management and the peculiarities of the functioning of non-state pension funds. Secondly, these are external risks that are independent directly from the activities of non-state pension funds. Management of this group of risks is the sphere of activity of the state. Under state control are political and economic courses countries, formation of legislation on non-state pension insurance, taxation system.
Internal risks are individual in nature and consist of asset management risk, liability management risk and administrative management risk. Asset management risk includes investment risk, which is certainly a key internal risk for the non-state pension fund industry, as well as the risk of non-receipt of pension contributions.
Investment risks imply the risk of failure to achieve a given return, preferably not lower than the inflation rate, and the risk of a decrease in current liquidity. This risk may lead to failure to fulfill the fund's direct obligations regarding the return on accruals to pension accounts. As you know, the most delicate aspect of investing pension funds is the balance between profitability and risk. However, limiting risk is a much higher priority for pension funds than for any other portfolio.
In the OPS system, the NPF invests pension savings, the placement of which is strictly regulated and is possible only through management companies (MCs) unaffiliated with the NPF on the basis of a trust management agreement. As part of their NPO activities, NPFs form pension reserves. According to current legislation NPFs are allowed to place their pension reserves independently or through a management company. The practice of interaction between non-state pension funds and management companies in the field of investment control comes down to two formats. The first format involves the creation of a separate division within the NPF responsible for financial risk management. As a result, the fund independently develops its investment strategy and broadcasts it to the Criminal Code. At the same time, the fund conducts a strict audit of management methods and monitors the execution of the investment declaration submitted to the management company. Such an interaction scheme requires significant material costs from non-state pension funds, which explains its low prevalence in the Russian pension market. Most funds, when transferring funds to the management of a management company, follow the path of least resistance. They completely delegate the entire investment process to managers, in rare cases holding joint investment committees with management companies.
A significant problem that NPFs face is the selection of the most effective management companies. There are various methods for such assessments, most of which are based on profitability for previous periods and a combination of formal characteristics of the management company (length of service, number of employees, amount of funds under management). Since 2011, the National Association of Pension Funds (NAPF) has been developing an industry standard for risk management, which will prescribe measures for the general organization of risk management in the fund, as well as control of market, credit and operational risks. The development of standardization in the pension market is closely related to the problem of controlling investment risks.
NPFs having separate division financial risk management and independently developing an investment strategy, based on the standard, have the opportunity to improve the investment process in accordance with leading risk management practices in the market. The majority of non-state pension funds, which completely delegate the entire investment process to the management company, purchase materials for auditing the risk management systems of the management companies with which they plan to cooperate.
Currently, less than half of the asset management companies on the trust management market have specialized divisions of the risk management system. The standard will include a significant list of requirements for the organization, including the mandatory presence separate division on risk management, the availability of methods and regulations used in the risk management process, as well as the procedure for updating them, and the employees of the department responsible for risk management. Thus, in order to preserve the NPF client base, the management company should now begin reorganization in order to create elements of a risk management system.
Such a strict approach to the selection of management companies on the part of non-state pension funds will stimulate increased competition among management companies and will help improve their efficiency and reliability. On the other hand, the introduction of the standard will lead to further consolidation of management companies in the pension segment, which in the current period is characterized by extremely high level captivity and a very uneven distribution of pension assets. All this will contribute to more transparent cooperation between management companies and non-state pension funds.
Two groups of restrictions have been identified that apply to the investment of pension savings by management companies: structural, relating to the list of objects and their share in the structure of the investment portfolio, and organizational, consisting of the requirements for the asset to be included in the investment portfolio and the issuers of securities in which it is allowed investing pension savings. Thus, the preparation of an investment declaration and the investment of pension savings is carried out by the management company under the influence of quite large quantity restrictions are not always justified. In essence, this means that the NPF operates within certain limits that directly determine the boundaries for improving the management of pension savings.
Due to the right of insured persons to annually choose the method of managing the funded part of the pension, it becomes possible to withdraw management company part of the funds held in trust. This fact limits the investment of pension savings in undervalued fundamental analysis securities, as well as in infrastructure projects, investments in which would undoubtedly contribute to increasing the efficiency of investing pension savings. It appears that improving the activities of trust management pension savings is associated with the need to minimize the negative impact of this factor on the management capital.
Thus, NPFs do not have permission to independently invest pension savings and the possibility of independently investing pension reserves is significantly reduced. It can be concluded that the process of investing pension assets is, in essence, not entirely controlled by the funds, and, therefore, these restrictions constrain the ability of non-state pension funds to fully prevent investment risks, which are the most common in the pension system.
The second type of risk in asset management is the risk of non-receipt of the investor's pension contributions. This type risk may provoke a situation of deviation in the negative direction of the investment return accepted in the actuarial calculations of the assignment, which may entail the fund’s failure to fulfill its obligations to accrue funds to pension accounts, as well as the fund’s solvency when paying pensions.
The risks of non-state pension funds when managing liabilities are not so obvious, and the consequences of the implementation of these risks usually manifest themselves in the long term. The risk of managing reserves and other liabilities lies primarily in the risk of errors in the assessment of existing pension obligations and the risk of errors in the formation of new obligations. When calculating the required amount of pension reserves, an actuarial assessment is used, based on the principle of equivalence of the size of pension reserves and pension liabilities of NPFs. To estimate the size of pension obligations, the mathematical expectation of the totality of upcoming pension payments, discounted at the time of calculation, is usually used. This value is calculated taking into account actuarial assumptions, namely the forecast of the dynamics of the rate of return on investments and mortality tables. It is obvious that creating a correct actuarial forecast of the dynamics of the investment return rate for long term, implying the validity of pension agreements, in an unstable economy is a very difficult task. It should also be noted that the mortality tables were developed based on life expectancy data for the country as a whole. However, life expectancy indicators for the contingent of participants in a particular fund may differ markedly from the average data. For NPFs, it would be more rational to use mortality tables developed for specific regions or for categories of people in a certain profession, since most funds are corporate organizations.
Thus, inaccuracy in the assessment of pension obligations may be caused by the use of incorrect formulas and calculation algorithms, errors in the development or operation of computer programs, errors in the source data, namely distorted information about the gender of participants and their date of birth, or, as noted above, incorrect assignment of actuarial proposals (actuarial returns and mortality tables) when making calculations. IN these cases You may be misinformed about the fund's liabilities.
A special type of liability management risk is the risk that the actual amount of pension payments exceeds its average estimate. It arises, as a rule, under the influence of fluctuations in the mortality of NPF participants. So, even when using theoretically adequate actuarial assumptions, using only the mathematical expectation of discounted pension payments to estimate the required amount of pension reserves is not enough due to the random, probabilistic nature of the flow of pension payments. Moreover, the more participants a non-state pension fund has, the smaller the ratio of the possible deviation of the payment amount to its average estimate will be. This circumstance makes large pension funds more reliable compared to small ones.
Another significant internal risk in the activities of NPFs is the risk of administrative management. This category may include the risk of unskilled fund management, the risk of crisis of founders and partners, as well as various operational risks associated with incorrect organizational structure, methodology, personnel, errors software and technical means.
It should be noted that the risk of unfair or unqualified fund management and operational risks were more characteristic of the first stage of the formation of non-state pension funds, when a number of funds were organized according to the principle financial pyramids. The risk of partnership lies in the possibility of financial losses due to failure to fulfill obligations by counterparties. NPF cooperation is legally established with many financial partners (management companies, banks, special depositories). Of course, it depends on the choice of NPF financial partner performance results depend. This type of risk also decreases with the development of the non-state pension insurance system, since it is directly related to the development of business reputation and the accumulation of experience of financial institutions in the pension services market.
The crisis of the main founders may emerge during a period of financial decline in the economy. However, the likelihood of such crises is very low and does not pose a significant threat to non-state pension funds. Since the law prohibits NPFs from investing more than 10% of the investment portfolio of their pension reserves in the founders’ projects.
We should not forget that most of the risks that NPFs face in their activities do not depend on the fund itself, and responsibility for some of them lies with the state, and some are determined by the global state of the economy. External risks consist of the risk of changes in legislation, demographic risk, and, in addition, the risk of a stock market crisis and an economic crisis.
The legislative framework pension reform is constantly being improved, amendments and additions are made to it. Over the years of reform, legislation has changed several times. At the same time, practice shows that for the success of pension reform, consistency, detailed development and a minimum of changes in the program after adoption are extremely important. legislative framework. Today, reforming the funded component of the pension system is not a way for its survival, i.e. forced, but it needs improvement.
To ensure sustainable development of the non-state pension fund system in modern conditions it is necessary to create a specialized department responsible for regulating the industry and having the right to initiate legislation. Currently, the NPF is essentially controlled by the Ministry of Health and social development(directly issues of pension provision), the Ministry of Finance ( investment activities), Ministry economic development(strategic issues) and the Federal Financial Markets Service of Russia (licensing and operational supervision). Therefore, the statement legislative changes on NPFs, implies coordination of the positions of these government bodies, which leads to a significant prolongation of the process of making the necessary legislative decisions.
In 2012, the first payments under compulsory pension insurance were made. The law on payments of the funded portion of pensions was adopted by the State Duma at the end of 2011, but it requires significant revision and the adoption of additional regulations. All four departments should take part in finalizing legislation, which means that there is high probability unpreparedness regulatory framework on time and the risk of delays in payment of pensions according to the law. And problems with the payment of the first pensions can cause a serious blow to the reputation of the NPF. The presence of a single industry-specific regulator would help prevent situations similar to the one that arose when the payment law was adopted and finalized.
Disputes over the advisability of introducing a single regulator in the pension segment have been going on for a long time. However, in Lately NPF managers are predominantly in favor of its creation. Thus, according to the results of an interactive survey conducted rating agency ExpertRA, at the IV annual conference “The Future of the Pension Market,” the vast majority of pension fund managers (88%) were confident that for the harmonious development of the pension market, a single regulator is needed. At the same time, the majority of participants in the interactive survey believe that the relevant regulator should be the Federal Financial Markets Service or a separate body under the Federal Financial Markets Service (67%).
The demographic risk in the activities of non-state pension funds is due to changes in the state of demographic situation. The population of retirement age is growing noticeably. According to Rosstat forecasts, in the next 20 years the ratio between the population at working age and at retirement age will worsen by one and a half times. By 2050, according to UN forecasts, this ratio will decrease by almost 2.5 times. If you look at the 100-year dynamics from 1950 to 2050, you will notice that the number of pensioners per worker has increased fivefold. According to Rosstat data for 2011 average duration life in Russia was 69 years. At the same time, there is a trend towards a steady increase in life expectancy as a result of improvements in its quality and working conditions. For example, the average life expectancy of a woman in the Russian Federation has increased by 44% since 1940, from 42 to 74 years. It is clear that in such conditions the mechanism of the pension system cannot operate without serious changes. Therefore, the question of raising the retirement age in the Russian Federation has now arisen. This circumstance, in turn, can significantly affect the activities of NPFs.
It is necessary to take into account the listed risks, as well as take into account the possibility of other risks. Excluding risks from consideration may result in the size of the obligations assumed by the fund to pay pensions exceeding the size of the formed pension reserves. Despite the fact that actuarial errors may not appear in the first years of NPF activity, they are likely to have a negative impact on the reliability of the fund. From all that has been said, we can conclude that achieving absolute reliability of non-state pension funds is impossible; however, a set of measures taken, taking into account all categories of risks, significantly contributes to increasing the reliability of non-state pension funds.
NPFs have already created a socially significant basis for the non-state system funded pensions. To develop it, it is necessary to change the format of state regulation of non-state pension funds, introduce standardization and increase the reliability of participants. A gradual transition from a strict restrictive policy in the field of placement of pension funds to the rules of reasonable investment, the development of own risk management systems in funds and management companies, as well as building clearer relationships with management companies should become priority areas improving the business processes of non-state pension funds in order to strengthen their reliability.