Government plans to allocate 52 billion rubles to jointly fund long-term savings programs
The Russian Personal Pension System (PPS) continued to gain traction in 2024, as more citizens joined the voluntary funded programme designed to supplement their basic state pension.
Launched in 2024, the PPS operates by allowing individuals to contribute a portion of their income or savings into personal pension accounts managed by state-run or private pension funds. The government encourages participation by matching contributions, with a maximum of 36,000 rubles per year for the next ten years.
Contributions can be made regularly or as lump sums, and the amount depends on the individual's choice and the rules of the pension fund managing the account. For example, citizens earning between 80,000 and 150,000 rubles per month are required to contribute 72,000 rubles per year, while those earning more than 150,000 rubles per month must contribute at least 144,000 rubles per year.
The funds, including the accumulated income and the state's addition, can be withdrawn after 15 years from the contract date, upon reaching a certain age (55 for women, 60 for men), or early in special life situations. However, the Bank of Russia did not disclose the number of PPS participants who withdrew their funds in 2024.
The PPS is of high interest among citizens, according to Prime Minister Mikhail Mishustin, who also announced that funds would be allocated from the government's reserve fund to non-state pension funds that engage in long-term savings formation for citizens. Despite this, the Bank of Russia did not disclose the names of the non-state pension funds that received funds from the government's reserve fund.
In 2024, 103.3 billion rubles in pension savings were accumulated under PPS contracts, with 101.6 billion rubles in contributions received. However, the Bank of Russia did not provide details on the current age or salary of the individuals who joined the PPS in 2024, nor did it disclose the number of active PPS contracts or the number of PPS participants who received the government's annual contribution.
The PPS is designed to enhance retirement security by combining individual responsibility with state support. Citizens' funds contributed through the PPS will be insured up to 2.8 million rubles, providing a safety net for participants.
By the end of 2024, 2.8 million people had joined the PPS program, indicating a growing interest in the system. As the PPS continues to evolve, it is expected to play a significant role in securing the financial future of Russia's retirees.
[1] https://www.bankofRussia.ru/ [2] https://www.gov.ru/ [3] https://www.pensionfund.ru/ [4] https://www.rosstrakh.ru/ [5] https://www.vtb.ru/
- The government's allocation of funds from the reserve fund to non-state pension funds signifies a growing emphasis on personal-finance and business strategies in the Russian Personal Pension System (PPS).
- As more citizens join the Russian Personal Pension System (PPS) to supplement their future personal-finance, the system's role in securing business and individual retirement-finance becomes increasingly significant.
