RUSSIA - The Russian financial market regulator has started an attempt to clean up some of the dead wood among the Russian non-state second pillar pension funds (NSPF).

A spokesman for the government body announced on Monday that the licences of 23 funds might be withdrawn because of "disclosure violations".

"In Russia, out of 337 NPFs about 100 are either ‘dead', that is they do not work and do not submit any reports to the Federal Service for Financial Market, and exist only on paper, or are ‘sleeping' (they still submit regular reports but still do not work in reality)," Alexander Kupriyanov, analyst with, explained to IPE, adding that "all these funds have practically zero balances".

The financial market regulator does not have any authority to withdraw licenses for non-state pension funds. However, the government body has given the funds a 20-day deadline in which to "correct the violations", otherwise license suspension requests will be filed with the courts.

Kupriyanov said that the initiative might succeed but it will take time.

In 2001 the government created the second (funded) pillar of the Russian pension system. Its current size is over €10bn with a potential to reach €23.4bn by 2012. The vast majority of the voluntary pension reserves (€8bn) sit with the ten largest NPFs with Gazfond holding €5bn.