Fixed Income Market Presentation slide image

Fixed Income Market Presentation

Institutional money: pension funds reform Pension assets¹ in Russia RUB bln Voluntary allocations in non-state pension funds Non-state pension funds - mandatory savings and pension reserves State pension fund - mandatory savings As % to GDP 5,6% 3830 3975 3102 832 900 2454 758 1 095 1 138 700 1556 666 391 643 153 1 363 1 678 1 903 1 937 760 2010 2011 2012 2013 2014 Key highlights Positive regulatory framework development: CBR became a regulator of the pension system ■ Adopted changes in pension funds regulation: "One year non-loss rule" was abolished Investment horizon of NPFs2 was extended to 5 years Customer incentive to stay with the fund manager not less than 5 years Guarantee fund mechanism (similar to Deposit Insurance Agency in the banking system) Number of individuals, whose pension savings are invested in non-state pension funds increased from ~1 mln in 2007 to ~28 mln in 2014 On Apr, 2015 the government made a decision to return funds for 2H'13-14 (clients who transferred their pension money from the State fund to NPFs - more than RUB 500 bln), which were under moratorium. New inflows to NPFs for 2014-2015 remains under moratorium and to be utilized for PAYGO system funding New contributions to NPFs will start from 2016 Exposure to equities is limited Pension system Investment portfolio State pension fund 12% 2% Fixed income ☑ MOSCOW EXCHANGE 86% Deposits 2014² NPFs ■ Cash ■Fixed income ■ Deposits Equities 51% 44% 44% 5% 2% 7% 55% 32% 41% Other 33% 29% 30% 72,5% 2,5% 2,7% 2,5% 21,1% Cash Equities Other RUS CHE³ NLD JPN CAN GBR USA AUS Source: OECD, investfunds.ru, FSFM, Economist Intelligence Unit, Russian State Statistics Agency (Rosstat), Tower Watson 1 Obligatory savings, not including reserves 2 For Russia mandatory savings managed both by NPFs (Non-state pension funds) and Pension fund of Russia 3 Chile 4 Source: Rosstat. GDP for 2014. 18
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