THE pension funds of tens of million of Russians are to be part handed over to foreign investment firms
THE pension funds of tens of million of Russians are to be part handed over to foreign investment firms, offering British fund managers* one of their biggest new-business opportunities for decades.
About £21bn of Russian assets are up for grabs over the next 10 years as the Russian authorities seek to improve pensioners' living conditions. The Russian Parliament, the Duma, has agreed that part of the 28% of income that Russian employers pay towards an employee's State pension shall go into a privately-managed fund for investment. At present the entire contribution from the country's 60m workforce is paid out to existing pensioners.
The law awaits President Putin's signature for enactment from 1 January. Tenders will then be sought for the asset management and contributions will start being paid in to the privately-managed fund. The Russians want the whole system up and running by the end of 2003. From 2004 Russians can choose to leave their pension assets with the State body, the Pension Fund of Russia, or place them with the private managers.
David Callund, a Russian government adviser, said: 'The asset management companies are not to be restricted to those of Russian nationality. The way is open for British fund managers to tender for what in the medium term, say over 10 years, is a very promising business.'