RUSSIA - Only two percent of Russian employees have chosen independent managers for their pension assets, prompting concerns over the country’s pension reform.

“I would say that’s the main concern for the pension system - the low number of employees that have given their money to independent fund managers,” said Oleg Lebedinets, an investment analyst at Brunswick Asset Management.

He was responding to new data showing that just two percent of employees had chosen an independent manager for their pension assets. There had been estimates that perhaps up to 10% would opt for independent managers.

In September Russia authorised 55 private asset managers to run pension fund money as part of the new reforms.

Lebedinets cited the lack of government promotion of pension reform as the main factor in the low take-up. “There’s a feeling the government is not interested in promoting the reform.”

“What concerns us is that there are no active steps being taken to remedy the situation,” he said. “In Russia many reforms begin then they falter. I’m afraid to say this is the case with pension reform.”

Lebedinets said more managers are to be allowed to run pension money, and that there is a June deadline for applications from asset managers. “We’re expecting the captive companies to join the pack as well,” he said, referring to companies affiliated to large groups.

Mikhail Zurabov, head of the state-controlled Pension Fund of Russia was quoted as saying in local media this week that pensions in Russia had risen by 3.35 times nominally and by 82% practically in the past four years.

He added said pension expenses now exceed six percent of gross domestic product, against 4.5% three years ago.