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The law aims to increase Russian citizens’ pension provisions by encouraging people to save for their pensions with the help of an incentive programme that will co-finance additional insurance contributions paid by citizens into the Pension Fund. Co-financing will be funded by money from the National Prosperity Fund, which forms part of the federal budget.

People who voluntarily join the programme between October 1, 2008 and October 1, 2013 will qualify for the offered state support. State support will continue over a ten-year period, starting from the year following the year of the insured individual’s payment of additional insurance contributions to the personal savings component of the pension.

The individual decides on the size of the additional contribution (it can be from 2,000 roubles to 12,000 roubles a year). The state will provide the same amount under the co-financing scheme. Individuals can make the contributions themselves (through credit organisations) or organise them through their employer.

Note of information on the Federal Law amending certain statutes of the Russian Federation following the adoption of the Federal Law on additional insurance contributions to the personal savings component of pensions and state support for pension savings

Amendments are being made to several existing laws. The amendments relate to the reporting and accounting of information on additional insurance contributions to the personal savings component of the pension and federal budget funds used for the personal pension savings co-financing programme.

Amendments are also being made to the Russian Federation Tax Code exempting from the personal income tax base federal budget money paid as part of the personal pension savings co-financing programme, and also contributions made by the employer for the employee’s benefit.

Furthermore, as from January 1, 2009, additional insurance contributions to the personal savings component of the pension will be included on the list of purposes to which social tax deductions apply. This list previously included spending on education, healthcare, and voluntary pension insurance.

Employers taking part in co-financing their employees’ personal pension savings will also qualify for tax incentives.