Investment of pension savings and unit funds’ assets: new rules
The Bank of Russia has changed the requirements for investing non-governmental pension funds’ (NPF) pension savings and investment funds’ (IF) assets. The new requirements are aiming to expand investment opportunities for NPFs and IFs and to mitigate adverse consequences of the coronavirus pandemic for financial market participants. The regulator’s instructions have been approved by Russia’s Ministry of Justice and become effective on 21 May 2020.
These instructions postpone from 1 July 2020 to 1 July 2021 the scheduled reduction in the concentration limits established for investing NPFs’ pension savings and IFs’ assets. The new rules also permit NPFs to invest pension savings in units of exchange-traded IFs.
In order to maintain the affordability of mortgage lending, the Bank of Russia has established a permanent 5% limit for investing pension savings in mortgage-backed bonds with a high credit rating. Concurrently, these securities will be excluded from the 10% limit for investment in a number of higher-risk assets, while this limit will be gradually cut to 7% by 1 July 2022.