Finance Ministry proposes to introduce responsibility for pension funds for investment results

Finance Ministry intends to introduce the responsibility for the results of investment funds for the pension money of citizens, setting the standard for their yield. Draft Amendments to the Law "On Non-State Pension Funds" published today on the federal portal of the draft regulations. Currently legislation requires the NPF 100% repayment of pension funds, regardless of the market situation. Ministry of Finance, in turn, suggests toughening responsibility of APF for the investment of pension accruals and reserves. With shareholders' funds will demand compensation for missed benefits if the Central Bank considers the action of the control ineffective. Market participants believe that this initiative will lead to the maintenance funds in the conservative strategy and reducing future retirement income. Under the bill, the fund is obliged to provide an economically viable rate of return of pension funds or pension funds reserves, taking into account the level of risk assets (the asset) that make up the pension funds or pension reserves. If the SPC will receive a loss, to compensate losses (including lost profits) customers it will have at their own expense. The decision on the compensation, according to the document, the committee may decide the financial supervision of the Bank of Russia. For example, if you find that fund managers violated the rules of investing, or if the regulator considers that NPF invested inefficiently future retirees. Deciding that the fund is obliged to pay its depositors, the Central Bank may take "on the basis of professional judgment, including the economically reasonable level of profitability of pension savings or pension funds reserves" with regard to the level of risk. To challenge his representatives NPF may commission the Bank of Russia, established by a decision of the Central Bank Board of Directors. The press service of the Ministry told RBC that the issue is in the competence of the Bank of Russia. They, in turn, explained that the draft law introduces the obligation of the Fund to organize the management of pension savings and pension reserves "with the intelligence, diligence and discretion solely for the benefit of insured persons." If pension funds and reserves are invested without a proper analysis, assets are acquired at inflated prices, the fund violates this duty, according to the Central Bank. "Economically reasonable rate of return - is the rate of return that can be obtained by investing in instruments with a risk level comparable to the level of risk in the fund's portfolio. If the yield on instruments in the fund's portfolio less yield counterparts, the obligation to fund its investment in the interests of the insured violates ", - said the regulator. The Central Bank made it clear that the bill does not require compensation for all losses (foregone profits), but only those that were obtained by acquiring assets at inflated prices. To avoid liability to investors managing NPF will only if it is proved that the loss occurred due to force majeure or beneficiary or the founder of management actions. However, market participants believe this tightening too strong. "This measure is excessively rigid. Earlier foundations required break-even investment, now the SPC, as the Ministry of Finance of logic, should ensure a certain level of profitability, "- says CEO of consulting company" pension partner "Sergei Okolesnov. He says that the regulator is trying to prevent the shareholders of the funds to invest in their own risky projects, may punish the whole market. "The introduction of the yield requirements may discourage managers invest in risky assets. Everyone will just invest in the BFL, but high return future retirees will not see "- fears Okolesnov. Top-manager of a large NPF do not understand how you can make demands for reasonable yield funds. "For example, if our fund placed money on deposit in the bank, and then the Central Bank revoked his license, then someone has to compensate the loss of customers?" - He argues. Finance assured that the practice of "reasoned opinions", which did not apply to NPF, can lead to numerous lawsuits funds to the regulator. Executive Director of NPF "Safmar" Evgeny Yakushev believes that the requirement of the Ministry of Finance to economically reasonable yields could change the entire landscape of the pension market. "In some countries, such as Slovakia, we have tried to introduce the liability of shareholders for the NPF investment results. This led to the exodus of APF in the conservative strategy ", - he said.