On September 27, 2021, the country’s president signed a decree that creates a new voluntary individual accounts pension program as of October 1, 2022. Employees covered by the country’s social security program who are at least 3 years younger than the official retirement age, can choose to participate in the new program and contribute up to 10% of gross monthly income to fund their individual accounts (the official retirement age is 63 and 58 for men and women, respectively, as of January 1, 2022). Workers’ contributions are tax deductible and workers can modify or suspend their contributions at any time. Employers must match the first 3% contributed by workers; however, their contributions to the social security program (PAYGO) will be proportionally reduced to maintain a total contribution rate of 28% of gross monthly payroll. According to the government, the new program aims to increase pension savings. The average social security old-age pension is currently around 545 rubles (approx. USD 223) per month. Other key aspects of the program include:

• Management and Investments: The program will be managed by Strativa, a state insurance company. Strativa will also decide how to invest individual account assets.

• Minimum rate of return: The guaranteed minimum rate of return on worker/employer contributions will be equal to the Central Bank’s refinancing rate, which is currently 9.25% per year.

• Benefits: On retirement, participants can choose to receive a tax-free monthly life annuity or annuity paid for 5 or 10 years. If the participant dies, the remaining funds in the individual account will be inherited by the eligible survivors.

Source: Intenational Update SSA Nov.2021; Date: November 2021