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. Last Updated: 07/27/2016

Troika Warns on Pension Plan

Legislation regulating the activities of nonstate pension funds contain shortcomings that could pose a threat to the Russian financial system if it isn’t amended, Troika Dialog managing director Pavel Teplukhin said Monday.

Teplukhin said the legislation contains vague wording that could be interpreted to mean that asset management companies must offer guaranteed profits on stocks — which would be a contradiction of the law on stock markets.

“It is necessary to forbid giving any guarantees that are impossible to fulfill,” Teplukhin said at a news conference.

Legislative contradictions have led to several conflicts between asset management companies and nonstate pension funds. In April, the Moscow Arbitration Court ordered Pioglobal Asset Management to pay more than 230 million rubles in compensation to the nonstate pension fund TNK-Vladimir. This sum included the money that TNK-Vladimir had given the company to manage and about 24 million rubles in minimum guaranteed profit.

Teplukhin said the shortcomings in the law have only affected a handful of asset management companies and nonstate pension funds in the current crisis, but the country’s financial system could collapse if another crisis erupts in five or six years without any amendments being made.

“Most asset management companies currently have no problems or court trials with nonstate pension funds,” Teplukhin said. “But we understand that the legislation needs to be amended.”

The government has made pension reform a priority, and asset management companies are eager to help fashion amendments to the 1998 law.

“We plan to partner with large nonstate pension funds in amending the legislation,” Teplukhin said. “This is the task for the next one to 1 1/2 years. We are going to start as soon as possible.”

Finam Management is also drawing up proposals for amendments.

“There are undoubtedly many problems. Our pension reform is young and imperfect,” Andrei Shulga, general director of Finam Management, said by telephone. “It needs improvements, and we are taking part in this work.”

Initial steps toward pension reform were taken early this month when representatives of the Finance Ministry, the Economic Development Ministry, the Federal Service for Financial Markets, the National Association of Nonstate Pension Funds and asset management companies discussed the problem at a conference in Khanty-Mansiisk on Oct. 1 and 2.