PFR history and status

The Pension Fund of the Russian Federation was formed on Dec. 22, 1990 by decision of the Supreme Soviet of the RSFSR № 442-1 "On the organization of the Pension Fund of the RSFSR" for public finance of pension provision management in Russia.

This resolution determined the status of the Pension Fund of the Russian Federation as an independent financial institution.

Its creation made it possible to introduce a fundamentally new process of financing and payment of pensions and benefits. The funds were withdrawn in a separate budgetary mechanism and began to form at the expense of required premiums. By the Regulation of the Russian Pension Fund, approved December 27, 1991, a special purpose of the PFR funds was stated, and secured a ban on their withdrawal from the Pension Fund budget for other purposes.

Initially, the main function of the Pension Fund of Russia was to collect insurance contributions to pay pensions for old age, disability and survivors' benefits. However, as early as 1992 in some regions of the country an experiment to create a single pension services (SPS) began, offering both the establishment and payment of state pensions. Further development of this process was the Presidential Decree of 27 September 2000 № 1709 "On measures to improve management of public pensions in the Russian Federation." He recommended the regional authorities to conclude with the RF Pension Fund Agreement on transfer powers to appoint and pay pensions to territorial PFR authorities. Those powers were at the time within the competence of the regional social protection authorities.

In 1997 the federal law "On Individual (personalized) record in the state pension insurance system" № 27-FZ came into force. In accordance with this law, the main importance for increasing the size of pensions was not the total worker seniority, but insurance record and amount of payments, which the employer effected on behalf of the employee. The Information Center of personalized record for easy connection with all the territorial Branches of the PFR and for maintenance of a personalized record database of the central level was established in the Pension Fund system.

In the future system of insurance contributions was consolidated by the Federal Law of 15.12.2001 № 167-FZ "On Obligatory Pension Insurance in the Russian Federation", according to which the new status of the PFR was defined, as an insurer and a government agency. The Law also defined the order of payment of insurance premiums for obligatory retirement insurance, rights and responsibilities of legal entities on obligatory pension insurance.

In 2001, in connection with the adoption of the Federal Law dated 17.12.2001 № 173-FZ "On labor pensions in the Russian Federation", the functions of the PFR widened. The Fund invested pension savings of the citizens through the management companies or private pension funds.

In addition to its principal activity, the Pension Fund since 2000 has funded social programs in Russian regions.

In 2008 the PFR for this purpose allocated 1 billion rubles and 1.2 billion rubles - in 2009.

Since 2005 the Pension Fund has also been entrusted to pay the citizens a monthly cash benefit and to exercise their rights to receive government social assistance in the form of a social services packet.

Since 2007, the PFR has been assigned the additional task - to issue certificates for the maternity (family) capital.

From January 1, 2010 the scope of the Russian Federation Pension Fund substantially expanded. The unified social tax (UST) has been replaced from January 1 by insurance premiums to the Pension Fund of Russian Federation, the Social Insurance Fund of the Russian Federation and the Obligatory Medical Insurance Funds. Moreover, the function of administration of premiums to the Pension Fund and Obligatory Medical Insurance Fund was transferred from the tax authorities to the PFR.

The Pension Fund was 20 years old in 2010. During these 20 years the PFR has become one of the largest organizations in the country. Its thousands of employees every day work to ensure that the pension system operated stably and reliably no matter what, and payments guaranteed by the Government were made in full and on time.

One of the future directions of the PFR work is an improvement in the quality of its service. The Fund will seek to ensure that any activity with citizens was productive and comfortable. For this purpose, new customer services have already been put into operation, the staff is constantly trained and retrained, and the Internet is actively used to provide services or reference information.