Supplementary pension accumulation insurance - a modern direction in the development of the pension system

Starting October 1, 2022, the Republic of Belarus launches a voluntary insurance program for an additional funded pension[1]. Its main goal is to increase the welfare of citizens of retirement age.

Program participants:

 

  

Essence of the program:  formation by a working citizen during their working life of additional pension savings through the employer's funds and their own funds by making monthly insurance premium contributions to RUP "Stravita".

The amount of insurance premiums is determined by the employee based on the chosen tariff under the additional funded pension insurance contract.

The employee has the right to choose a premium tariff from 1% to 10%, and the employer, in turn, from 1% to 3%. As a result, the total minimum tariff is 2%, and the total maximum tariff is 13%.

 

Program features:

 

• During the term of the additional funded pension insurance contract, the employee has the right to change the premium tariff once a year;
• The employee has the right to suspend (resume) participation in voluntary insurance for an additional funded pension at any time;
• Contributions are accumulated personally on the individual personal account of the citizen opened with RUP "Stravita";
• Investment of insurance premiums, their placement on market terms in deposits, securities, and accrual of additional income in the form of an insurance bonus to the personal account;
• The rate of return on the additional funded pension insurance contract is set at the refinancing rate of the National Bank in effect on

corresponding period of the insurance term;

The accumulative pension payment is made in equal installments over 5 or 10 years (at the employee's choice) after they reach retirement age; 

Program Advantages:

for the employee:

 

• employer's financial participation in the formation of additional pension savings;
• receiving additional income to the labor pension;
• receiving a social tax deduction on the amount of insurance contributions paid to RUP "Stravita";
• inheritance of pension savings;
• state control over the fulfillment of warranty obligations provided for by the voluntary insurance contract for an additional accumulative pension, as well as over the financing of labor pensions for old age and other payments provided for by the legislation on state social security.

for the employer:

 

• insurance contributions are included in the cost of production and sale of products, goods (works, services) taken into account for taxation;
• contributions for state social security to the Social Protection Fund of the Population and Belgosstrakh are not accrued on the amount of insurance contributions;
• reduction in the amount of mandatory insurance contributions for pension insurance paid by the employer to the budget of the social protection fund of the population by the amount of the insurance contribution paid by the employer to RUP "Stravita".