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Pensions law in Russia almost there

The Russian supplementary pensions sector moved closer to legislative legitimacy at federal level when the pension bill received its third and final Parliamentary reading in mid-June.

The bill now moves to the Federation Council, a regional tier of government, which is expected to ap-prove the bill leaving only presidential assent required for it to become law.

Greg McTaggert, Moscow manager of Callund Consulting who advises the Russian government through the British Foreign Office's Know-How fund says that he expected the bill to go through the council before the start of the holiday season this month.

The council consists of all the governors of the Russian regions," he says. "A large number of those have already got regional laws on non-state pension funds, so if they have already passed their own laws, it is difficult to believe that they won't pass laws at federal level. We are reasonably confident it will pass."

Pension funds may also receive a fiscal boost with the government introducing a draft law on rationalising the tax code into the Duma. And whilst the non-state pension funds (NPFs) are not mentioned specifically, it is thought likely that some elements of the reform will make them more fin-ancially attractive, particularly as it has been suggested that the pro-reform ministers at the Department for Social Development favour the 'exempt, exempt, exempt' taxation model.

With the state system in crisis, the government is also considering a radical pensions reform based on the Polish model, including the principle of transferring the liability from the state to the individual through private ac-counts, with NPFs positioning themselves for a role in running these accounts. The model is being promoted by the World Bank in both countries, but the presence in Russia of an existing supplementary sector is one of the salient differences between the two countries. John Lappin"

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