In 2016 Q2, the total assets of non-governmental pension funds (NPFs) and pension savings of the Russian Pension Fund (PFR) increased by 3.8% to 4.989 trillion rubles (more than 6% of GDP). These data are given in the Survey of key indicators of non-governmental pension funds published on the Bank of Russia website.
Over Q2, NPF pension savings went up by 5.5% and exceeded 2 trillion rubles. The increase was mainly generated by the investment income, and also receipts under the pension co-funding programme in 2015. Besides, additional savings were transferred during the transitional period of 2015, and certain savings were transferred to funds which joined the system of guaranteeing pension savings in 2016 Q1.
Since 2016, return on investment of NPF pension savings has been 9.5% p.a., with inflation being at 6.7%. These funds have managed to outpace inflation by investing in corporate bonds, whose share in NPF portfolios increased from 42.6% to 49.3%. In Q2, growth in the balanced pension contribution index at Moscow Exchange was 9.2% p.a. and growth in the bond subindex was 13% p.a.
At the same time, the amount of funds in settlement accounts with NPFs contracted considerably. As the bigger portion of funds have been already transferred during the transition period, the NPFs do not need to maintain considerable savings in settlement accounts. Moreover, Q2 saw a decrease in the share of mortgage securities in NPF portfolios.
The trend towards its steady contraction will continue further. In June, amendments were introduced to the investment rules for pension savings, according to which the total share of mortgage participation certificates, equities and corporate bonds, whose ratings are below the threshold set by the Bank of Russia, shall not exceed 10% of the pension savings portfolio of a NPF.
Central Bank of Russia
