MOSCOW, January 24 (RIA Novosti)
Pension Funds to Pay for World Cup Infrastructure Improvements
At the Davos Forum, Dmitry Medvedev had to reveal how Russia plans to improve the investment climate at the expense of the accumulated pension fund. The money deposited by future pensioners will be used to fund infrastructure projects – provided the deposits can be recovered. How exactly – the government will have to decide by May.
The prime minister stressed that the decision was final. The voluntary component of the retirement pension will be used partly to subsidize long-term cost efficient projects and infrastructure first. Is there any guarantee that the pension contributions will not be misappropriated? Medvedev assured listeners that a mechanism would be developed to protect the assets.
The decision was made at a meeting on January 22 when Dmitry Medvedev instructed those involved to establish a system of guarantees for both state run and private pension management companies as well as for clients of non-government pension funds. Differing approaches may be required such as a nominal insurance fee guaranteed for voluntary savings while the pay-as-you-go component may be insured by a fixed reserve, as with bank deposits. Moreover, it is not advisable for depositors to transfer money from one fund to another too often if they expect their pension savings to be “long-term money.”
To cover the difference between the pension fund and the amount accumulated by the time of retirement, a guarantee fund will be established. It is not yet known where funding for the guarantee fund will come from. The most plausible option is to start with the money in the National Welfare Fund. When the system is fully operational, money from non-government pension funds will be used.
Also, there is a possibility that the annual losses of non-government pension funds will be distributed between their customers. Regarding the legal status of pension funds, closed funds are to remain non-profit while public funds will become corporations.
Several government meetings this week have spurred the idea of sponsoring infrastructure projects with the pension money. In late 2012, the government granted Vnesheconombank (VEB), currently holding 1.5 trillion rubles in pension savings, with the right to invest the money in infrastructure bonds. The priority will be given to railway upgrades, energy infrastructure in Russia’s Far East and Eastern Siberia, transportation in Moscow and the other 2018 FIFA World Cup host cities, and housing. Perhaps the government has no alternative but to start working on this issue before the meeting of G20 finance ministers in mid-February. One of the main topics of the forum hosted by Russia is long-term investment. With its plans to cut the funded component of the retirement pension from 6 percent to 2 percent and to transfer 4 percent to the pay-as-you-go component, Russia will be pursuing the unorthodox and will have to explain itself.
“Mr Alto” Turns 60: An Interview
Renowned Russian violist and conductor Yury Bashmet turns 60 today. A festival featuring many of his well known musician friends has been organized in Moscow. Even an unexpected dispute with song writer Sergei Nikitin who refused to attend the event “for political reasons” could not mar the celebration.
As a member of the presidential council on culture, what would you say an artist’s relationship with the government should be?
My interpretation of Beethoven’s or Schubert’s music doesn’t change depending on who’s in power. When Sergei Prokofiev or Dmitry Shostakovich composed music on the orders of the Soviet government, their music was no worse for it. We should stop swinging between political extremes, erecting monuments and then pulling them down, like Dzerzhinsky…
Would you have left that one alone?
I would. Destroying monuments won’t change history.
What’s Vladimir Putin like when no camera is on him?
He’s good-natured and sincere. He always hears you out and tries to offer real help. He is also painfully law-abiding. Everything needs to add up for him, to the letter: Yes is Yes and No is No. Friends are friends. Others are others. We are about the same age and we’re friends.
Putin loves Russia dearly. I know because I tour the world a lot. I’ve had this feeling lately, something we haven’t felt since the Soviet Union collapsed – that I have a huge, powerful and respected country behind me.
Statements supporting Putin meet with controversial reactions in Russia. Have you ever come under criticism in the West for supporting him?
I had this situation once. I had three concerts cancelled in the States because the person who financed them turned out to be strongly opposed to Putin. This was certainly unpleasant and most of all hurt the people who bought tickets. But I was glad I could fly home a week earlier and enjoy a vacation.
What do you think of the Magnitsky Act?
I believe the United States is interfering in Russia’s internal affairs, but it isn’t right either that children’s issues got caught up in this mess.
If you had known Sochi would host the 2014 Olympics, would you have planned you Winter Festival there?
I don’t think so. I would have seen it as purely a career gimmick. But I actually planned it several months before Sochi won the bid.
What is your attitude to your own age? Are you trying to analyze past years?
Trying to evaluate oneself can very negatively affect one’s creative ego. Age certainly brings wisdom. But one should try not to get too clever to keep the soul alive.
What is your birthday wish?
My wish is to remain in good health for as long as possible. My best gift would be my own arts center, like the ones Valentin Yudashkin and Slava Zaitsev have, and Mikhail Turetsky got for his 49th birthday. But I don’t think anyone can give me that. It’s just a dream.
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