BLACKSQUARE

Today the distributive pension system is acting, i.e. insurance fees, paid by working citizens, are distributed for pensions. But the amount of retirees is growing and the amount of working citizens is falling, that’s why working population can’t provide the deserved pension. For this reason it was decided to reform retirement system, to pass from distributive system to accumulating one, i.e. insurance fees are accumulated at individual personal account of assured person and based on the accumulated sum he is granted a pension according to the law. But it isn’t possible to pass immediately from distributive system to accumulating one, that’s why there is a persons’ category that has accumulative part of the future labor pension forming from 2002.

Future pension includes three parts: basic, insurance and accumulative. Basic part is established in fast size and is guaranteed by the State, insurance part is formed at the expense of fees paid for insurance pension part, the accumulative one is formed at the expense of fees paid for accumulative part.

By the moment of the retirement fees paid for insurance part are used for pension payment, and the accumulative part funds that are on the personal account of every assured person are invested, i.e. assured persons can place retirement savings through management company or non- governmental retirement fund.

The State accounts for the pension’s accumulative part safety. It is responsible for creating of the conditions at the accumulative funds market, that exclude non-purpose usage of these funds, and for selection and access of only reliable and responsible management companies to this market. The State also accounts for organization of legality control and validity of management companies’ actions with future retirees assets.

However the State doesn’t account for risks connected with market course ripplings. These risks lay on the assured person who made independent dicision about the choice of management company.

The exception are only those who declined from management company selecting trusting this choice to the State. In this case the State invests citizens’ savings into reliable assets that will have relatively small yield.

This lower yield must become stimulus for people not to move the decision to the State but to decide themselves whom to intrust their funds.