Challenges of the Mandatory Funded Pension System in the Russian Federation

Rudolph, Heinz P. ; Holtzer, Peter

关键词: ACCOUNTING;    AGENCY PROBLEM;    ALTERNATIVE INVESTMENT;    AMOUNT OF CAPITAL;    ANNUAL RETURNS;   

DOI  :  10.1596/1813-9450-5514
RP-ID  :  WPS5514

学科分类：社会科学、人文和艺术（综合）

来源: World Bank Open Knowledge Repository

【 摘 要 】

The overwhelming number of contributorsthat have been allocated into the default option is one ofthe main characteristics of the Russian second pillar. Thisfinding confirms that the level of financial literacy formost of the participants is not sufficient to make informedportfolio selections. The authors argue that the currentsystem is perfectly consistent with a solid second pillar,but the authorities should focus their attention in thestrategic asset allocation of pension funds. Since in theshort and medium term it is unlikely to see improvements infinancial literacy of individuals that may overcome thecomplexity of these decisions, the authorities can play animportant role in designing default investment portfoliosthat can be aligned with expected replacement rates for thecontributors. The current investment regulation of thedefault option induces investment in inefficient portfoliosthat are unlikely to bring returns above inflation, andprobably will result in very low replacement rates forcontributors. Further liberalization of the investments ofthe pension portfolio; improvements in the governance andsupervision of the pension system; and greater certaintyabout the ownership of the funds are necessary steps tocomplete the pension reform launched in 2002.