Information deficit hampers pension reforms

The major reason for low activity of people regarding choosing a managing company for investing pension savings is a lack of information, Russian Deputy Prime Minister for social policies Galina Karelova told Channel One. In her opinion, distrust "in what is being done" also influences this considerably, "because many have a galling experience of MMM and other financial pyramids". However, the placement of the accumulative part of pensions with managing companies is an absolutely new system "with described insurance issues that eliminate such facts", the top official stressed.

For example, even if a managing company goes bankrupt, people have three major guarantees. Firstly, every managing company is insured. Secondly, every deal made by a managing company is to be registered, checked and approved by a depositary. Thirdly, the Pension Fund allocates money to a managing company as a trust deal, which means that if any bankruptcy occurs, these resources are not lost, they remain with the fund, Karelova concluded.