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Interview with Anatoly Puzyna, President of Non-Governmental Pension Fund Socium

Could you please tell us about the performance of Non-Governmental Pension Fund Socium in 1H 2011?

 We started the year well. In the first six months of 2011, the fund’s property increased by more than 20%, now reaching the value of RUB 7.8 bln. The amount of pension accruals also increased – as of 31 July, it was RUB 6,495 mln. The aggregate contribution of the founding party was also increased to RUB 692 mln, which enabled the Non-Governmental Pension Fund Socium to confirm it’s A+ rating of reliability, according to the National Rating Agency and to be ranked fifth among non-governmental pension funds by this parameter.
We ensured that our contributors receive the return above the level of inflation. The interim return in 1H 2011 was over 6% under the programme of mandatory pension insurance. Is nothing put-of-the-way happens on the stock market in 2H, we are to show very good return indicators this year.
In 1H 2011, we received over RUB 95 mln in pension contributions under corporate pension programmes and individual pension plans offered by the fund within the framework of non-government pension programme. Payments in the period amounted to RUB 73 mln. Overall, since the foundation of the fund, RUB 902 mln was paid, including lifetime and temporary pensions, as well as payments to heirs.

Could you tell us about the Fund’s programmes?

The fund offers eight different programmes of non-governmental pension payments: solidary and individual, lifetime and temporary, for own and third parties’ benefit, inherited and non-inherited, savings.
In 2011, Non-Governmental Pension Fund Socium keeps contributing to the programme of governmental co-financing of pensions, which was launched in 2008. It is a unique opportunity to increase the funded component of the future pension. Under this programme, voluntary contributions (from RUB 2,000 to 12,000 annually) are to be doubled by the government for ten years. The term for inclusion in the programme is limited, ending in 2013. To participate in the programme one should apply to the nearest office of Non-Governmental Pension Fund Socium.
Moreover, Non-Governmental Pension Fund Socium works with mothers who decide to allocate their maternity subsidy to the funded part of their pension. Such allocation enables each woman to increase the size of her future pension considerably. Before the date when retirement pension is granted, the funds of the maternity subsidy allocated to the future pension can be reallocated to other legitimate purposes with the return on investment accrued.

What are the nearest plans of Non-Governmental Pension Fund Socium?

 Earlier this year, the fund’s board agreed on a new development strategy. The fund will have a captive market nature. We expect to bring 54-55 thousand new clients to the fund annually. Entities of Basic Element Group which includes Non-Governmental Pension Fund Socium invest over RUB 700 mln to development of Non-Governmental Pension Fund Socium.
We are currently developing and implementing Unified Corporate Pension System (UCPS) for Basic Element Group entities. This pension system will ensure additional non-governmental pension to the Group employees. This year, we are focusing on development of corporate pension programmes at Irkutskenergo and VostSibUgol. The pension programmes launched at these companies are a prototype of UCPS. We intend to start implementing the system at other companies of the Group this year.
We continue improving our client service. The web site is being redesigned and transferred to a new platform. Soon, the clients’ Internet office development will be completed. Besides, we plan to send SMS notifications on annual newsletter, and starting 2012 we intend to launch a free support hotline of the fund’s call centre. Therefore, I would like to ask all the insured persons who have changed their residence in the recent year to inform the fund about it. We notify our clients of the state of their accounts annually, but many letters are returned to the fund due to failure to reach the addressee.
We revised out approach to client attraction. Now it will be more conservative. We plan to rely primarily on the current agent networks of companies close to Socium, including Ingosstrakh, Ingosstrakh-Life, Soyuz bank.

Why did you decide to refuse from the services of third-party agents?

 It is well known that many Russian non-governmental pension funds have faced the problem of untrustworthy agents, who falsified agreements of people’s transfer from one fund to another to receive agent fees.
Unfortunately, Non-Governmental Pension Fund Socium also had to face this problem, although to a lesser degree. Court proceedings are underway between the fund and OOO Vklad-Sibir, a former agent suspected of falsifying insurance agreements. A criminal action was started against OOO Vklad-Sibir and its head, Roman Klepakov, in the Kemerovo Region under the Criminal Code Article 159 Fraud. The principal stand of Non-Governmental Pension Fund Socium is that it will never pay for falsified agreements under any circumstances.
Unfortunately, Russia legislation regulating non-governmental pension funds is not well-elaborated yet and provides poor protection to the funds regarding such cases, which brings about long court proceedings. Apart from legal action, untrustworthy agents arrange dirty informational campaigns, throw in false publications, lying to people and damaging the reputation of Non-Governmental Pension Fund Socium. We explain the real situation to our clients and cooperate with other funds to improve legislation.
Using agent networks of companies close to Socium will enable us to considerably minimize the risks of pension agreements being falsified by bad faith agents.

25 August, 2011

August 25, 2011
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