How is the future pension formed and calculated?

Since 2002, the system of compulsory pension insurance (OPS) has been operating in Russia, but two types of pensions – insurance and funded – were introduced only in 2015. Every month, the employer contributes 22% of your pre-tax salary to the Russian Pension Fund. By default, these 22% go to the formation of an insurance pension. However, you can choose another option, in which case 6% of the transferred amount will go to the formation of a funded pension, and the remaining 16% – to the formation of an insurance one.

What is an insurance pension

An insurance pension is a monthly and lifetime payment of money, which is assigned to a citizen to compensate for wages or other income received during the period of employment. Accordingly, there are three types of insurance pension in Russia: for old age, for disability and for the loss of a breadwinner (to compensate for the income lost by disabled members of the insured person due to his death).

At the same time, the insurance pension consists of two parts – the solidary part of the tariff and the individual part.

The solidary part of the tariff is formed for all working citizens born in 1967 and younger at the expense of 6% of the salary before tax deducted by the employer (that is, the deduction of 13% of personal income tax). A fixed payment for the old-age insurance pension is formed from the solidarity part of the tariff – as of January 1, 2020, this amount was 5686.25 rubles.

The individual part of the tariff is also formed for citizens born in 1967 and younger at the expense of amounts deducted by the employer. If you have made your choice in favor of a funded pension, then the transferred amount will be 10% of your salary before tax, if you did not make such a choice, then 16%. At the same time, insurance premiums are taken into account on an individual pension account and converted into points. Therefore, the future pension will depend on the points you have accumulated and, most importantly, on the value of the point established by the state. As of January 1, 2020, the cost of 1 point was 93 rubles.

What is a funded pension

The funded pension is also paid for life and on a monthly basis, but is formed not only from the demolitions of the employer, but also the income from their investment. Investments are carried out by non-state pension funds or the Pension Fund of Russia through management companies.

It is worth remembering that during 2014-2022, in accordance with the adopted legislation, funded pensions are not replenished from new mandatory pension insurance contributions – all 22% of the employer’s payment goes to finance the insurance pension.

A funded pension is formed for citizens born in 1967 and younger, if by the end of 2015 a choice was made in its favor. Until the end of 2013, the funded pension was formed at the expense of 6% of your salary, which was transferred by the employer – this money was accumulated in an individual personal account. Now there is a moratorium on the funded pension, but you can manage the funds accumulated on your personal account – they can be transferred to a non-state pension fund that will invest them. Accordingly, upon reaching retirement age, you will be paid an insurance pension, a funded pension, as well as income from investing pension savings by the selected pension fund.

But for citizens born in 19966 and older, the formation of a funded pension can occur only through voluntary contributions under the State Co-financing Program for the Formation of Pension Savings, as well as through the allocation of funds from maternity (family) capital to a funded pension.