The Ministry of Finance has developed a bill on "automatic conversion" of pension savings into a long-term savings plan starting April 1, 2027. The bill is already ready and the government is supposed to discuss it this week. According to the draft document, the pension savings (including the so-called "quiet", currently managed by VEB) will be automatically converted into a long-term savings plan (LTS, launched in 2024). "The proposed measure equalizes the rights and opportunities for the formation of long-term savings of both today's clients of the Social Fund of Russia and clients of non-state pension funds. This will give citizens more opportunities to manage these funds, and also create conditions for the consolidation of additional capital," the department hopes. In total, 6.6 trillion rubles of pension savings of 36.5 million Russians are subject to conversion to PDS. ◼ An "authorized fund" will be created with mandatory government participation to manage the funds. Therefore, the formation of long-term savings for citizens will remain under the control of the state. BT: While we are talking about the project, the details of the mechanism and the implications for citizens' rights depend on its final version. But the idea itself raises fundamental questions. Economists remind that from 2002 to 2013, employers deposited 6% of the salary of citizens born in 1967 and below to the financed part of the pension. In 2014 the state instituted a "freeze" of these deposits - new deposits are no longer accepted there, they are used to pay current pensioners. However, trillions of rubles already created before 2014 remain in the accounts. Most citizens (the so-called "quiet ones") do not manage this money in any way, and by default it is managed by the state management company - VEB. RF. WEB. RF keeps the money of the "quiet people" in the most conservative assets - mainly government bonds (OFZ) and deposits of the largest banks.

The Ministry of Finance has developed a bill on "automatic conversion" of pension savings into a long-term savings plan starting April 1, 2027. The bill is already ready and the government is supposed to discuss it this week. According to the draft document, the pension savings (including the so-called "quiet", currently managed by VEB) will be automatically converted into a long-term savings plan (LTS, launched in 2024). "The proposed measure equalizes the rights and opportunities for the formation of long-term savings of both today's clients of the Social Fund of Russia and clients of non-state pension funds. This will give citizens more opportunities to manage these funds, and also create conditions for the consolidation of additional capital," the department hopes. In total, 6.6 trillion rubles of pension savings of 36.5 million Russians are subject to conversion to PDS. ◼ An "authorized fund" will be created with mandatory government participation to manage the funds. Therefore, the formation of long-term savings for citizens will remain under the control of the state. BT: While we are talking about the project, the details of the mechanism and the implications for citizens' rights depend on its final version. But the idea itself raises fundamental questions. Economists remind that from 2002 to 2013, employers deposited 6% of the salary of citizens born in 1967 and below to the financed part of the pension. In 2014 the state instituted a "freeze" of these deposits - new deposits are no longer accepted there, they are used to pay current pensioners. However, trillions of rubles already created before 2014 remain in the accounts. Most citizens (the so-called "quiet ones") do not manage this money in any way, and by default it is managed by the state management company - VEB. RF. WEB. RF keeps the money of the "quiet people" in the most conservative assets - mainly government bonds (OFZ) and deposits of the largest banks.