Nearly half of Russian companies (46%) are willing to co-finance their employees’ pensions as part of the Long-Term Savings Program (LTSP), according to a report by “Izvestia”. The highest interest in supporting employees’ pensions comes from the medical and construction sectors. Additionally, 22% of companies would agree to such contributions only if the government provides tax incentives, with IT industry employers particularly interested in these benefits.
Challenges and Opportunities
President of the National Association of Non-State Pension Funds, Sergey Belyakov, highlighted that not all organizations can afford corporate pension programs due to their cost or unprofitability, especially for smaller teams. However, the LTSP could fill this gap and become an attractive part of corporate social packages. Efforts to implement tax incentives for employers willing to co-finance LTSP accounts are already underway.
Understanding the Long-Term Savings Program
The Long-Term Savings Program is a voluntary accumulation and savings product with state participation. It allows citizens to actively accumulate capital through both personal contributions and pension savings.
Key Features of the Program:
- Voluntary Contributions: Participants make voluntary contributions, which are then invested by a non-state pension fund to ensure returns on investments.
- State Co-Financing: The state co-finances up to 36,000 rubles per year.
- Tax Deduction: Participants can receive a 13% tax deduction on contributions up to 400,000 rubles.
- State Guarantee: There is a state guarantee on contributions up to 2.8 million rubles.
- Minimum Participation Period: The minimum participation period in the program is 15 years.
- Eligibility for Payments: Participants are eligible for payments after 15 years of participation or upon reaching the age of 55 for women and 60 for men.
Before deciding to participate in the Long-Term Savings Program, it is recommended to consult with a financial expert to understand the potential benefits and implications.
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