Challenges of the Mandatory Funded Pension System in the Russian Federation
The overwhelming number of contributors that have been allocated into the default option is one of the main characteristics of the Russian second pillar. This finding confirms that the level of financial literacy for most of the participants is not...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101230163755 http://hdl.handle.net/10986/3998 |
| id |
okr-10986-3998 |
|---|---|
| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCOUNTING AGENCY PROBLEM ALTERNATIVE INVESTMENT AMOUNT OF CAPITAL ANNUAL RETURNS ARBITRAGE ASSET ALLOCATION ASSET MANAGEMENT ASSET MANAGER ASSET MANAGERS BANK DEPOSIT BANK DEPOSITS BANKRUPTCY BASIS POINTS BEST PRACTICES BOND ISSUANCE BORROWING CAPITAL INFLOWS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CENTRAL BANKS CIVIL CODE COMMODITIES COMPETITIVE MARKET COMPETITIVE MARKETS CONFLICTS OF INTEREST CONSERVATIVE INVESTMENT CONTRIBUTION CONTRIBUTION RATES CONTRIBUTIONS CORPORATE BONDS CORPORATE GOVERNANCE CORPORATE SECURITIES CREDIBILITY DEBT DEFINED CONTRIBUTION PENSIONS DEMAND FOR GOVERNMENT SECURITIES DEPOSIT PORTFOLIO DEVELOPMENT BANK DISCOUNT RATES DIVERSIFIED PORTFOLIO DIVERSIFIED PORTFOLIOS DOMESTIC BANK DOMESTIC MARKET ECONOMIC DEVELOPMENT EDUCATIONAL CAMPAIGNS EMERGING ECONOMIES EQUITIES EQUITY HOLDINGS EXCHANGE RATE FEE STRUCTURE FINANCIAL ADVISORS FINANCIAL CRISIS FINANCIAL INSTITUTION FINANCIAL ISSUES FINANCIAL LITERACY FINANCIAL MARKET FINANCIAL MATTERS FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FIXED INCOME FIXED INCOME SECURITIES FOREIGN FINANCIAL INSTITUTIONS FOREIGN INVESTORS FRAUD FUND MANAGEMENT FUND MANAGER FUND MANAGERS GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT FINANCES GOVERNMENT FINANCING GOVERNMENT GUARANTEES GOVERNMENT PENSION GOVERNMENT SECURITIES HOMEOWNERS HUMAN RESOURCES INCOME INSTRUMENTS INDIVIDUAL ACCOUNT INDIVIDUAL ACCOUNTS INFLATION INFLATION INDEX INFLATION RATE INFLATION RISK INSTITUTIONAL INVESTORS INSTRUMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL DIVERSIFICATION INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL INVESTMENTS INTERNATIONAL PORTFOLIO INTERNATIONAL STANDARDS INVESTING INVESTMENT ALTERNATIVES INVESTMENT DECISIONS INVESTMENT FUND INVESTMENT HORIZON INVESTMENT INCOME INVESTMENT POLICIES INVESTMENT POLICY INVESTMENT PORTFOLIO INVESTMENT PORTFOLIOS INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RETURNS INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY INVESTMENTS IN GOVERNMENT SECURITIES LABOR FORCE LEGAL FRAMEWORK LEVEL OF RISK LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDITY LOCAL BANKS LOCAL MARKET LONG-TERM INTERESTS LONG-TERM INVESTMENT LONG-TERM INVESTORS LOW COST MANDATORY PENSION FUNDS MARK TO MARKET MARKETING MONETARY FUND MORTGAGE MORTGAGE BONDS MULTIPLE ASSET MUNICIPAL BONDS MUNICIPAL SECURITIES OCCUPATIONAL FUNDS OCCUPATIONAL PENSION PENSION PENSION ACCOUNTS PENSION ASSETS PENSION FUND PENSION FUND ASSET PENSION FUND ASSETS PENSION FUND COMPANIES PENSION FUNDS PENSION ISSUES PENSION PRODUCTS PENSION REFORM PENSION REFORMS PENSION SAVINGS PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS POLICY RESPONSE PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO ALLOCATIONS PORTFOLIO CHOICE PORTFOLIO DIVERSIFICATION PORTFOLIO MANAGEMENT PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PENSION PLANS PRIVATE PLACEMENTS PUBLIC FINANCES PUBLIC PENSION QUOTATION SYSTEM RAPID GROWTH RATE OF RETURN RATES OF RETURN REAL EXCHANGE RATE REGULATORY FRAMEWORK REPLACEMENT RATE REPLACEMENT RATES RESERVE RESERVE REQUIREMENT RESERVES RETIREMENT RETIREMENT AGE RETURN RETURNS RISK MANAGEMENT SALES SALES AGENTS SENIOR SHAREHOLDER SHORT-TERM DEPOSITS SOLVENCY SOVEREIGN RISK STAKEHOLDERS STATE BONDS STATE PENSION STATE PENSION SYSTEM SUPERVISORY AGENCY SUPERVISORY AUTHORITY SUPERVISORY BOARD TAX TERM DEPOSITS TRANSPARENCY TREASURY TREASURY BILLS VALUATION VALUATION PROCEDURES VALUE OF CONTRIBUTIONS VARIABLE ANNUITIES WAGE WAGE GROWTH WAGES YIELD CURVE |
| spellingShingle |
ACCOUNTING AGENCY PROBLEM ALTERNATIVE INVESTMENT AMOUNT OF CAPITAL ANNUAL RETURNS ARBITRAGE ASSET ALLOCATION ASSET MANAGEMENT ASSET MANAGER ASSET MANAGERS BANK DEPOSIT BANK DEPOSITS BANKRUPTCY BASIS POINTS BEST PRACTICES BOND ISSUANCE BORROWING CAPITAL INFLOWS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CENTRAL BANKS CIVIL CODE COMMODITIES COMPETITIVE MARKET COMPETITIVE MARKETS CONFLICTS OF INTEREST CONSERVATIVE INVESTMENT CONTRIBUTION CONTRIBUTION RATES CONTRIBUTIONS CORPORATE BONDS CORPORATE GOVERNANCE CORPORATE SECURITIES CREDIBILITY DEBT DEFINED CONTRIBUTION PENSIONS DEMAND FOR GOVERNMENT SECURITIES DEPOSIT PORTFOLIO DEVELOPMENT BANK DISCOUNT RATES DIVERSIFIED PORTFOLIO DIVERSIFIED PORTFOLIOS DOMESTIC BANK DOMESTIC MARKET ECONOMIC DEVELOPMENT EDUCATIONAL CAMPAIGNS EMERGING ECONOMIES EQUITIES EQUITY HOLDINGS EXCHANGE RATE FEE STRUCTURE FINANCIAL ADVISORS FINANCIAL CRISIS FINANCIAL INSTITUTION FINANCIAL ISSUES FINANCIAL LITERACY FINANCIAL MARKET FINANCIAL MATTERS FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FIXED INCOME FIXED INCOME SECURITIES FOREIGN FINANCIAL INSTITUTIONS FOREIGN INVESTORS FRAUD FUND MANAGEMENT FUND MANAGER FUND MANAGERS GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT FINANCES GOVERNMENT FINANCING GOVERNMENT GUARANTEES GOVERNMENT PENSION GOVERNMENT SECURITIES HOMEOWNERS HUMAN RESOURCES INCOME INSTRUMENTS INDIVIDUAL ACCOUNT INDIVIDUAL ACCOUNTS INFLATION INFLATION INDEX INFLATION RATE INFLATION RISK INSTITUTIONAL INVESTORS INSTRUMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL DIVERSIFICATION INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL INVESTMENTS INTERNATIONAL PORTFOLIO INTERNATIONAL STANDARDS INVESTING INVESTMENT ALTERNATIVES INVESTMENT DECISIONS INVESTMENT FUND INVESTMENT HORIZON INVESTMENT INCOME INVESTMENT POLICIES INVESTMENT POLICY INVESTMENT PORTFOLIO INVESTMENT PORTFOLIOS INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RETURNS INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY INVESTMENTS IN GOVERNMENT SECURITIES LABOR FORCE LEGAL FRAMEWORK LEVEL OF RISK LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDITY LOCAL BANKS LOCAL MARKET LONG-TERM INTERESTS LONG-TERM INVESTMENT LONG-TERM INVESTORS LOW COST MANDATORY PENSION FUNDS MARK TO MARKET MARKETING MONETARY FUND MORTGAGE MORTGAGE BONDS MULTIPLE ASSET MUNICIPAL BONDS MUNICIPAL SECURITIES OCCUPATIONAL FUNDS OCCUPATIONAL PENSION PENSION PENSION ACCOUNTS PENSION ASSETS PENSION FUND PENSION FUND ASSET PENSION FUND ASSETS PENSION FUND COMPANIES PENSION FUNDS PENSION ISSUES PENSION PRODUCTS PENSION REFORM PENSION REFORMS PENSION SAVINGS PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS POLICY RESPONSE PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO ALLOCATIONS PORTFOLIO CHOICE PORTFOLIO DIVERSIFICATION PORTFOLIO MANAGEMENT PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PENSION PLANS PRIVATE PLACEMENTS PUBLIC FINANCES PUBLIC PENSION QUOTATION SYSTEM RAPID GROWTH RATE OF RETURN RATES OF RETURN REAL EXCHANGE RATE REGULATORY FRAMEWORK REPLACEMENT RATE REPLACEMENT RATES RESERVE RESERVE REQUIREMENT RESERVES RETIREMENT RETIREMENT AGE RETURN RETURNS RISK MANAGEMENT SALES SALES AGENTS SENIOR SHAREHOLDER SHORT-TERM DEPOSITS SOLVENCY SOVEREIGN RISK STAKEHOLDERS STATE BONDS STATE PENSION STATE PENSION SYSTEM SUPERVISORY AGENCY SUPERVISORY AUTHORITY SUPERVISORY BOARD TAX TERM DEPOSITS TRANSPARENCY TREASURY TREASURY BILLS VALUATION VALUATION PROCEDURES VALUE OF CONTRIBUTIONS VARIABLE ANNUITIES WAGE WAGE GROWTH WAGES YIELD CURVE Rudolph, Heinz P. Holtzer, Peter Challenges of the Mandatory Funded Pension System in the Russian Federation |
| geographic_facet |
Europe and Central Asia Europe and Central Asia Europe Eastern Europe Commonwealth of Independent States Asia Russian Federation |
| relation |
Policy Research working paper ; no. WPS 5514 |
| description |
The overwhelming number of contributors
that have been allocated into the default option is one of
the main characteristics of the Russian second pillar. This
finding confirms that the level of financial literacy for
most of the participants is not sufficient to make informed
portfolio selections. The authors argue that the current
system is perfectly consistent with a solid second pillar,
but the authorities should focus their attention in the
strategic asset allocation of pension funds. Since in the
short and medium term it is unlikely to see improvements in
financial literacy of individuals that may overcome the
complexity of these decisions, the authorities can play an
important role in designing default investment portfolios
that can be aligned with expected replacement rates for the
contributors. The current investment regulation of the
default option induces investment in inefficient portfolios
that are unlikely to bring returns above inflation, and
probably will result in very low replacement rates for
contributors. Further liberalization of the investments of
the pension portfolio; improvements in the governance and
supervision of the pension system; and greater certainty
about the ownership of the funds are necessary steps to
complete the pension reform launched in 2002. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Rudolph, Heinz P. Holtzer, Peter |
| author_facet |
Rudolph, Heinz P. Holtzer, Peter |
| author_sort |
Rudolph, Heinz P. |
| title |
Challenges of the Mandatory Funded Pension System in the Russian Federation |
| title_short |
Challenges of the Mandatory Funded Pension System in the Russian Federation |
| title_full |
Challenges of the Mandatory Funded Pension System in the Russian Federation |
| title_fullStr |
Challenges of the Mandatory Funded Pension System in the Russian Federation |
| title_full_unstemmed |
Challenges of the Mandatory Funded Pension System in the Russian Federation |
| title_sort |
challenges of the mandatory funded pension system in the russian federation |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101230163755 http://hdl.handle.net/10986/3998 |
| _version_ |
1764389411365060608 |
| spelling |
okr-10986-39982021-04-23T14:02:14Z Challenges of the Mandatory Funded Pension System in the Russian Federation Rudolph, Heinz P. Holtzer, Peter ACCOUNTING AGENCY PROBLEM ALTERNATIVE INVESTMENT AMOUNT OF CAPITAL ANNUAL RETURNS ARBITRAGE ASSET ALLOCATION ASSET MANAGEMENT ASSET MANAGER ASSET MANAGERS BANK DEPOSIT BANK DEPOSITS BANKRUPTCY BASIS POINTS BEST PRACTICES BOND ISSUANCE BORROWING CAPITAL INFLOWS CAPITAL REQUIREMENT CAPITAL REQUIREMENTS CENTRAL BANKS CIVIL CODE COMMODITIES COMPETITIVE MARKET COMPETITIVE MARKETS CONFLICTS OF INTEREST CONSERVATIVE INVESTMENT CONTRIBUTION CONTRIBUTION RATES CONTRIBUTIONS CORPORATE BONDS CORPORATE GOVERNANCE CORPORATE SECURITIES CREDIBILITY DEBT DEFINED CONTRIBUTION PENSIONS DEMAND FOR GOVERNMENT SECURITIES DEPOSIT PORTFOLIO DEVELOPMENT BANK DISCOUNT RATES DIVERSIFIED PORTFOLIO DIVERSIFIED PORTFOLIOS DOMESTIC BANK DOMESTIC MARKET ECONOMIC DEVELOPMENT EDUCATIONAL CAMPAIGNS EMERGING ECONOMIES EQUITIES EQUITY HOLDINGS EXCHANGE RATE FEE STRUCTURE FINANCIAL ADVISORS FINANCIAL CRISIS FINANCIAL INSTITUTION FINANCIAL ISSUES FINANCIAL LITERACY FINANCIAL MARKET FINANCIAL MATTERS FINANCIAL PERFORMANCE FINANCIAL SECTOR FINANCIAL SECTOR DEVELOPMENT FIXED INCOME FIXED INCOME SECURITIES FOREIGN FINANCIAL INSTITUTIONS FOREIGN INVESTORS FRAUD FUND MANAGEMENT FUND MANAGER FUND MANAGERS GLOBAL CAPITAL GLOBAL CAPITAL MARKETS GOVERNMENT BOND GOVERNMENT BONDS GOVERNMENT DEBT GOVERNMENT FINANCES GOVERNMENT FINANCING GOVERNMENT GUARANTEES GOVERNMENT PENSION GOVERNMENT SECURITIES HOMEOWNERS HUMAN RESOURCES INCOME INSTRUMENTS INDIVIDUAL ACCOUNT INDIVIDUAL ACCOUNTS INFLATION INFLATION INDEX INFLATION RATE INFLATION RISK INSTITUTIONAL INVESTORS INSTRUMENT INTEREST RATES INTERNATIONAL BANK INTERNATIONAL BANKS INTERNATIONAL DIVERSIFICATION INTERNATIONAL FINANCIAL INSTITUTIONS INTERNATIONAL INVESTMENTS INTERNATIONAL PORTFOLIO INTERNATIONAL STANDARDS INVESTING INVESTMENT ALTERNATIVES INVESTMENT DECISIONS INVESTMENT FUND INVESTMENT HORIZON INVESTMENT INCOME INVESTMENT POLICIES INVESTMENT POLICY INVESTMENT PORTFOLIO INVESTMENT PORTFOLIOS INVESTMENT PROCESS INVESTMENT REGULATION INVESTMENT REGULATIONS INVESTMENT RETURNS INVESTMENT RISKS INVESTMENT STRATEGIES INVESTMENT STRATEGY INVESTMENTS IN GOVERNMENT SECURITIES LABOR FORCE LEGAL FRAMEWORK LEVEL OF RISK LIFE INSURANCE LIFE INSURANCE COMPANIES LIQUIDITY LOCAL BANKS LOCAL MARKET LONG-TERM INTERESTS LONG-TERM INVESTMENT LONG-TERM INVESTORS LOW COST MANDATORY PENSION FUNDS MARK TO MARKET MARKETING MONETARY FUND MORTGAGE MORTGAGE BONDS MULTIPLE ASSET MUNICIPAL BONDS MUNICIPAL SECURITIES OCCUPATIONAL FUNDS OCCUPATIONAL PENSION PENSION PENSION ACCOUNTS PENSION ASSETS PENSION FUND PENSION FUND ASSET PENSION FUND ASSETS PENSION FUND COMPANIES PENSION FUNDS PENSION ISSUES PENSION PRODUCTS PENSION REFORM PENSION REFORMS PENSION SAVINGS PENSION SYSTEM PENSION SYSTEMS PENSIONERS PENSIONS POLICY RESPONSE PORTFOLIO PORTFOLIO ALLOCATION PORTFOLIO ALLOCATIONS PORTFOLIO CHOICE PORTFOLIO DIVERSIFICATION PORTFOLIO MANAGEMENT PRIVATE PENSION PRIVATE PENSION FUNDS PRIVATE PENSION PLANS PRIVATE PLACEMENTS PUBLIC FINANCES PUBLIC PENSION QUOTATION SYSTEM RAPID GROWTH RATE OF RETURN RATES OF RETURN REAL EXCHANGE RATE REGULATORY FRAMEWORK REPLACEMENT RATE REPLACEMENT RATES RESERVE RESERVE REQUIREMENT RESERVES RETIREMENT RETIREMENT AGE RETURN RETURNS RISK MANAGEMENT SALES SALES AGENTS SENIOR SHAREHOLDER SHORT-TERM DEPOSITS SOLVENCY SOVEREIGN RISK STAKEHOLDERS STATE BONDS STATE PENSION STATE PENSION SYSTEM SUPERVISORY AGENCY SUPERVISORY AUTHORITY SUPERVISORY BOARD TAX TERM DEPOSITS TRANSPARENCY TREASURY TREASURY BILLS VALUATION VALUATION PROCEDURES VALUE OF CONTRIBUTIONS VARIABLE ANNUITIES WAGE WAGE GROWTH WAGES YIELD CURVE The overwhelming number of contributors that have been allocated into the default option is one of the main characteristics of the Russian second pillar. This finding confirms that the level of financial literacy for most of the participants is not sufficient to make informed portfolio selections. The authors argue that the current system is perfectly consistent with a solid second pillar, but the authorities should focus their attention in the strategic asset allocation of pension funds. Since in the short and medium term it is unlikely to see improvements in financial literacy of individuals that may overcome the complexity of these decisions, the authorities can play an important role in designing default investment portfolios that can be aligned with expected replacement rates for the contributors. The current investment regulation of the default option induces investment in inefficient portfolios that are unlikely to bring returns above inflation, and probably will result in very low replacement rates for contributors. Further liberalization of the investments of the pension portfolio; improvements in the governance and supervision of the pension system; and greater certainty about the ownership of the funds are necessary steps to complete the pension reform launched in 2002. 2012-03-19T18:43:35Z 2012-03-19T18:43:35Z 2010-12-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20101230163755 http://hdl.handle.net/10986/3998 English Policy Research working paper ; no. WPS 5514 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper Europe and Central Asia Europe and Central Asia Europe Eastern Europe Commonwealth of Independent States Asia Russian Federation |