A federal bill on the fulfillment of the 2018 budget of the Russian Pension Fund was discussed and approved at today’s meeting of the Federation Council.
According to the bill, the 2018 PFR budget had revenue of 8 269.6 billion rubles: 9.6 billion rubles or 0.12% more than in 2017. Mandatory pension insurance contributions, which serve as the main source of PFR income, amounted to 4 948.4 billion rubles: 466.5 billion rubles or 10.4% more than in the previous year.
Most revenue was constituted by insurance pension contributions: they grew to 4 947.9 billion rubles over the year. Funded pension contributions amounted to 0.45 billion rubles.
The share of insurance contributions in total revenue grew by 5.6% to 60% in 2018. The coverage of insurance pensions with contributions exceeded 73% (as against 70% in 2017).
Other insurance pension obligations, such as their increase and benefits from the government and insurance companies, were covered with allocations from the federal budget.
Their amount reached 1 840.4 billion rubles in 2018, or 231.6 billion rubles less than in 2017. The amount of mandatory pension insurance transfers for insurance payments reduced even more, by 300.3 billion rubles or 32.2%.
Federal budget funds were allocated for valorization (increase) of old-age insurance pensions (682.9 billion rubles), and indexation of the pension point value and the fixed payment of insurance pension (183.5 billion rubles).
Funds were also assigned for mandatory pension insurance benefits for citizens and insurance companies, including early retirement, inclusion of socially significant, periods of life in the length of employment – people do not work during such periods but their insurance pension is still being formed, and discounted rates of insurance contributions.
Alongside mandatory pension insurance, the Pension Fund acts as the government pension and social security agent: pays certain types of pensions, social benefits, and pension supplements and provides maternity capital.
In 2018, the federal budget allocations for those purposes amounted to 1 389 billion rubles or 43% of all transfers. Most funds were spent on state pensions (450 billion rubles) and monthly benefits (401 billion rubles).
On the whole, the federal budget allocations to the Pension Fund stood at 3 229.3 billion rubles in 2018. The allocations accounted for 39.1% of the PFR total revenue: it decreased by 5.5% since 2017.
Pension saving revenue of the budget amounted to 77.6 billion rubles. Most of the revenue came from investment of pension savings (61.9 billion rubles), voluntary contributions made by citizens under the co-funding program in 2018 (4.9 billion rubles), government co-funding of voluntary contributions of citizens in 2017 (5.1 billion rubles), and revenue from private pension funds (5.1 billion rubles).
Expenditures of the 2018 PFR budget amounted to 8 428.7 billion rubles: 110 billion rubles or 1.3% more than in 2017. The value of insurance pensions and pension supplements increased by 171.5 billion rubles to 7 339 billion rubles or 87.1% of total expenditures.
Some 6 748.9 billion rubles were spent on paying insurance pensions, alongside 453.7 billion rubles spent on paying social pensions. More than 18.7 billion rubles were paid as pension savings.
The amount of social benefits provided by the PFR in 2018 grew by 14.4 billion rubles (3%) to 502.5 billion rubles or 6% of total budget expenditures.
Compared to 2017, expenditures grew most in such areas are insurance pensions (+370.9 billion rubles), state pensions (+21.1 billion rubles), and monthly benefits (+8.95 billion rubles).
The 2018 PFR budget had a purely technical deficit of 159.1 billion rubles.
The deficit of 110.2 billion rubles was related to pension savings transferred by citizens (at the amount of 168.8 billion rubles) from the Russian Pension Fund to private pension funds.
By law, the transfers are accomplished by use of savings withdrawn from the PFR from management companies. This money is not included in the PFR revenue, and savings handed over to private funds are listed as expenditures, which creates a technical deficit. This deficit is covered with funds in trust management and on temporary deposits (as of early 2018, the sum amounted to 1 244 billion rubles).
The PFR budget deficit unrelated to pension savings reached 48.9 billion rubles in 2018 and was fully covered by the 2017 budget balance.
The Russian Pension Fund completely and timely fulfilled its obligations of paying and raising pensions and benefits in 2018.