Russia postpones deadline for pension opt-out
RUSSIA – The Russian government has agreed to push back its deadlines for individuals wishing to ‘opt out’ and select a private asset manager.
The original deadline for Russians to decide whether they wanted the funded part of their state pension managed by the state-appointed bank, Vneshekonombank, or by one of the 55 licensed private managers, was October 15.
They should have received information on their individual accounts, and letters informing of the new second pillar system and how to select a manager, by August. They would have had over two months to decide.
By the middle of August, however, only 1.7 million of the 40 million letters had been delivered, and “paper jams”, “postal problems”, and even “dust” were listed as excuses by the government in the local press.
Many mangers have criticised the hold-up as a deliberate attempt to discourage the selection of private asset managers, and therefore retain control of the pension fund money.
This week, however, the government agreed to set a new timetable for the reform. Now statements and letters must be delivered by November 1. The deadline for responses is now December 31.
The delays mean that private asset managers will now not see pension fund money transferred to them until at least April 2004, rather than the proposed January 1 2004.
One asset manager said: “The State has the money and prefers to not part with it, and they are doing everything they can to delay it. Proper planning could have told them about printing the letters. The process has been badly planned and badly prepared.”