Pension Savings in Russia 2014 by Andrey Demchuk

Pension Savings in Russia 2014 Moscow. 2015

Contents 1. Key Market Indicators – Mandatory Pensions....................................................................................................................................... 2 Figure 1.1. Personal applications for a new pension insurance provider (investment portfolio)...................................................................................... 2 Figure 1.2. Growth in number of insured individuals and average account balance (mandatory pensions)..................................................................... 3 Figure 1.3. Distribution of pension savings between PFR and NPF’s following 2013-2014 Campaign............................................................................ 3 Figure 1.4. Distribution of insured parties between PFR and NPF’s following 2013-2014 Campaign............................................................................. 3 Figure 1.5. Growth in Pension Savings......................................................................................................................................................................... 4

2. Competitive Environment................................................................................................................................................................................... 4 Table 2.1. Consolidation of NPF’s................................................................................................................................................................................ 5 Figure 2.1. Pension Savings by NPF............................................................................................................................................................................. 6 Figure 2.3. Map of Major NPF’s by Number of Insured Individuals, Total Savings and Average Clients Balance............................................................... 6 Figure 2.2. Insured Parties by NPF............................................................................................................................................................................... 6

3. Returns on Pension Savings............................................................................................................................................................................... 7 Table 3.1. Annual Returns – NPF’s.............................................................................................................................................................................. 8 Figure 3.1. Map of Major NPF’s by Cumulative Returns (2009-2014), Total Savings and Average Clients Balance......................................................... 9 Table 3.2. Ranking of NPF’s by returns, 2014........................................................................................................................................................... 10 Table 3.3. Ranking by cumulative returns, 2009-2014............................................................................................................................................. 10 Table 3.4. Ranking of Management Companies by Returns, 2014............................................................................................................................ 11 Table 3.5. Ranking of Management Companies by Cumulative Returns, 2009-2014................................................................................................. 11

4. The Structure of Invested Pension Savings.............................................................................................................................................. 12 Table 4.1. Share of bank deposits in portfolios held by NPF’s, VEB and management companies, 31.12.2014........................................................... 12 Figure 4.1. Structure of Invested Pension Savings ..................................................................................................................................................... 12 Figure 4.2. Structure of Investment Portfolios – NPF’s............................................................................................................................................... 13 Figure 4.3. Structure of Investment Portfolios – VEB.................................................................................................................................................. 14 Figure 4.4. Structure of Investment Portfolios – Private Management Companies...................................................................................................... 15

5. Moscow Exchange Pension Asset Indices............................................................................................................................................... 16 Table 5.1. Growth in Pension Asset Indices from Start of Year.................................................................................................................................... 16 Figure 5.1. Pension Asset Indices (from 2007)......................................................................................................................................................... 16 Figure 5.2. Pension Asset Indices (from 01.01.2014)............................................................................................................................................... 16

Appendix 1. Key Indicators for NPF’s in the Pension Savings Market, 31.03.2015............................................................... 17 Appendix 2. NPFs’ Cumulative Returns on Invested Pension Savings............................................................................................. 19 Appendix 3. NPFs’ Annual Returns on Invested Pension Savings...................................................................................................... 20 Appendix 4. Major NPF Investors by Asset Class....................................................................................................................................... 21 Top 20 NPF’s by holdings of federal government bonds, 31.12.2014....................................................................................................................... 21 Top 20 NPF’s by holdings of non-state bonds, 31.12.2014...................................................................................................................................... 21 Top 20 NPF’s by holdings of regional government debt, 31.12.2014........................................................................................................................ 21 Top 20 NPF’s by share holdings, 31.12.2014........................................................................................................................................................... 21 Top 20 NPF’s by holdings of mortgage securities, 31.12.2014 ................................................................................................................................ 22 Top 20 NPF’s by cash holdings, 31.12.2014 ........................................................................................................................................................... 22 Top 20 NPF’s by bank deposits, 31.12.2014............................................................................................................................................................ 22 Top 11 NPF’s by holdings of international financial organisation bonds, 31.12.2014................................................................................................ 22 Top 20 NPF’s by miscellaneous assets, 31.12.2014.................................................................................................................................................. 23

Additional clarification and comments........................................................................................................................................................... 23 Disclaimer....................................................................................................................................................................................................................... 23

P E N S I O N SAV I N G S I N R U S S I A . 2 0 14

P E N S I O N SAV I N G S I N R U S S I A . 2 014

1. Key Market Indicators – Mandatory Pensions 2014 was the most difficult and challenging year in the entire history of Russian non-state pension funds (NPF’s). The range of negative factors included: falling prices across the financial markets, as a result of which many pension funds showed accounting losses; uncertainty about the savings component of pension assets, including a freeze on contributions; and changes to regulatory and supervisory procedures, which altered the legal status of non-state pension funds and created of a System of guarantees. Last year NPF’s received no new contributions to pension savings accounts and there was no change in the number of individuals covered. In accordance with amendments to legislation, 2015 saw a decision to “unfreeze” personal applications submitted during the period 2013-2014. Applications to transfer savings to NPF’s were approved by the Pension Fund of the Russian Federation (PFR) only in cases where the fund in question had been admitted to the guarantee programme by 31 March 2015, where the application concerned the choice of management company, or where the covered individual wished to transfer his account from a non-state fund back to the PFR. Funds that – for whatever reason – had not yet become joint-stock companies and joined the guarantee programme by the cut-off date saw an outflow of clients in 2013-2014 that, unlike in previous periods, was not offset by an inflow of new ones. Over the past two years a total of 24.8 million applications were submitted to the PFR, 18.1 million in 2013 and 6.7 million in 2014. Of these, 12.3 million were reviewed and 10.4 million had been approved as of 31 May 2015.1 The remaining 1.9 concerned NPF’s that had not yet been admitted to the guarantee programme and so could not be approved at this time.

Figure 1.1. Personal applications for a new pension insurance provider (investment portfolio) 14

Total: 12.3 0.7

Total: 13.0

3.5

Total: 6.2 0.2

Total: 5.3 6

Total: 2.2

0.1

Total: 3.9 0.4 0.1

0.8

6.1

1.9

1.3

0.7

0.2 0.1

1.9

3.4

4.5

4.7

6.1

0 2009

PFR to NPF*

2010

PFR to NPF**

2011

2012

Change of NPF

2013-2014

NPF to PFR/choice of asset management company portfolio

Source: PFR, our calculations and forecast * number of applicants whose pension savings were transferred to one of 26 NPF’s that had joined the guarantee programme as of 24.04.2015 ** number of applicants who requested that their pension savings be transferred to NPF’s that had not joined the guarantee programme as of 24.04.2015

1 PFR. Public Annual Report for 2014.

2015 (forecast)

P E N S I O N SAV I N G S I N R U S S I A . 2 014

The pension savings system was set up in 2002 and pension savings were first transferred to non-state pension funds in 2005. The process of instituting this new mandatory pension system – together with rapid growth in the asset management by NPF’s – is expected to continue until 2022-2027, when citizens born in 1967 reach retirement age and will receive the first pay-outs based on pension savings. Following the 2013-2014 campaign the number of clients served by non-state pension funds reached 28.5 million, with an average individual account balance of R52 800.

Figure 1.2. Growth in number of insured persons and average account balance (mandatory pensions) 30

million people

average balance 52.8 49.2

60.0

52.1 50.0

42.2 20

40.0

33.7

30.0

24.3 19.4

20.0

7.4

10.5

1.9

8.6 3.6

5.5

10.0

6.0

10.9

15.2

19.5

22.2

22.1 28.3

2005 6 III 6 VI 6 IX 2006 7 III 7 VI 7 IX 2007 8 III 8 VI 8 IX 2008 9 III 9 VI 9 IX 2009 10 III 10 VI 10 IX 2010 11 III 11 VI 11 IX 2011 12 III 12 VI 12 IX 2012 13 III 13 VI 13 IX 2013 14 III 14 VI 14 IX 2014 15 III 15 V

0.9 0

11.8

Million insured persons

Average balance, RUR ‘000

Source: Bank of Russia, our calculations

By mid-2015 the pension savings held by NPF’s had reached a total of nearly R1.5trn, or 46% of all pension savings in Russia. We estimate that more than 50% of citizens born in or after 1967 had by that time chosen a non-state pension fund to handle their mandatory pension coverage. If all age groups are included (i.e. together with the “excluded generation” of men born between 1953-1966 and women born between 1957-1966), NPF’s served approx. 35% of all individuals with pension savings accounts.

Figure 1.3. Distribution of pension savings between PFR and NPF’s following 2013-2014 Campaign

Figure 1.4. Distribution of insured parties between PFR and NPF’s following 2013-2014 Campaign

PFR (private asset management companies) RUR 32 bn 1%

PFR (VEB) RUR 1,711 bn 53%

Source: PFR, our calculations

NPF's RUR 1,495 bn 46%

PFR (private asset management companies) 0.5 million 1%

PFR (VEB) 51.9 million 64%

Source: PFR, our calculations

NPF's 28.3 million 35%

0.0

P E N S I O N SAV I N G S I N R U S S I A . 2 014

As of late May 2015 the Russian pension system as a whole held more than R3.2trn in pension savings, equivalent to 4.6% of GDP. This represents a significant investment resource. This year for the first time the pension Asset management companies by the state corporation VEB declined, falling to R1.7trn. The volume of pension savings managed by private asset management companies also declined, to R32bn.

Figure 1.5. Growth in Pension Savings RUR bn

% of GDP

3,500

Total: 1,756

2,500

2,000

Total: 915 Total: 573

1,500

1,000

Total: 97 94 3

2004

VEB

Total: 184

177 6 2005

Total: 402

Total: 286

267

8 36

12 27 363

2006

343

481

1,334

2.5% 2.0%

1,643

1,865

1,902

1,711

1.5%

1.0% 0.5%

740

0.0%

2007

2008

2009

Private asset management companies

2010

2011

NPF’s

2012

2013

2014

2015V*

% of GDP (right-hand scale)

At the same time the total volume of pension asset management by all market players (VEB, private аsset management companies and NPF’s) reached approx. R4.2trn at the end of May, equivalent to 6.0% of GDP.

2. Competitive Environment The period 2013-2014 saw an acceleration in the process of consolidation among pension market players, along with shifts in ownership and the formation of pension fund groups. This disrupted the continuity of several data series on non-state pension funds as they were re-structured and their mandatory pension business was split off into separate joint-stock companies. As before quasi-state NPF’s manage a substantial 21.2% of pension savings; these funds are ultimately controlled by state-sector enterprises, state-owned banks and regional governments. The largest private-sector NPF’s, however, control more than 61.2% of pension savings and serve 65.3% of the individuals covered.

3.0%

Source: Bank of Russia, PFR, Rosstat, our calculations 2

2 our estimate

3.5%

155

1,129

1,086

9 10

Total: 387

1,495 4.0%

669

394

5.0% 4.5%

Total: 2,346

3,000

500

Total: 3,239

Total: 3,069

Total: 2,989

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Table 2.1. Consolidation of NPF’s3 Group (NPF)3

Quasi-state NPF’s

individuals covered, ‘000

Market share, individuals covered

Average account balance, ‘000 RUR

243,948.9

21.2%

3,310.8

15.0%

73.7

75,988.3

6.6%

1,058.7

4.8%

71.8

VTB Pension Fund

70,045.5

6.1%

1,069.1

4.9%

65.5

Gazfond Pension Savings

64,462.1

5.6%

733.2

3.3%

87.9

Khanty-Mansiysk

10,503.8

0.9%

137.2

0.6%

76.6

Transneft

6,502.3

0.6%

48.8

0.2%

133.3

Atomgarant

4,893.5

0.4%

57.1

0.3%

85.7

Neftegarant AO

4,418.6

0.4%

75.5

0.3%

58.6

DIF

4,091.3

0.4%

80.4

0.4%

50.9

Almaznaya Osen

2,159.6

0.2%

36.4

0.2%

59.3

Rostvertol

655.9

0.1%

11.6

0.1%

56.3

VNIIEF-GARANT

228.1

0.0%

2.9

0.0%

79.4

226,587.8

19.7%

3,573.2

16.2%

63.4

152,474.5

13.3%

2,481.3

11.3%

61.4 67.9

Otkritie Group NPF of Electric Power Industry

Market share (savings)

Sberbank NPF

Lukoil-Garant OAO 3

Savings, RUR mn

74,113.4

6.4%

1,091.8

5.0%

ALOR Group

170,970.1

14.9%

4,739.2

21.5%

36.1

KIT Finance

66,106.5

5.8%

1,976.5

9.0%

33.4

Promargofund

54,786.6

4.8%

1,738.2

7.9%

31.5

Nasledie

50,077.0

4.4%

1,024.4

4.6%

48.9

O1 Group

153,623.9

13.4%

2,804.1

12.7%

54.8

Future

114,841.2

10.0%

1,785.4

8.1%

64.3

37,082.6

3.2%

997.8

4.5%

37.2

1,700.1

0.1%

20.9

0.1%

81.5 43.0

StalFond Telekom-Soyuz 5

RGS

71,829.7

6.3%

1,671.8

7.6%

Sun Group

59,066.4

5.1%

1,369.7

6.2%

43.1

SLP

34,322.9

3.0%

821.7

3.7%

41.8

Sunny Coast

15,937.2

1.4%

256.6

1.2%

62.1

Adekata-Pension

4,715.3

0.4%

181.5

0.8%

26.0

Sberegatelny

2,769.0

0.2%

79.6

0.4%

34.8

Uraloboronzavodsky

1,178.2

0.1%

28.6

0.1%

41.2

109.2

0.0%

1.2

0.0%

92.7

34.7

0.0%

0.5

0.0%

74.1

BIN Group

40,244.4

3.5%

983.5

4.5%

40.9

European

15,912.3

1.4%

246.9

1.1%

64.4

Doverie

12,421.7

1.1%

401

1.8%

31.0

Regionfund

11,104.1

1.0%

319

1.4%

34.8

806.3

0.1%

16.6

0.1%

48.7

30,399.4

2.6%

502.7

2.3%

60.5

27,549.1

2.4%

473.1

2.1%

58.2 96.3

Sunny Time Zashchita budushchego 7

Education & Scince 8

Renova Group BIG Vladimir

2,850.4

0.2%

29.6

0.1%

22,324.1

1.9%

417.5

1.9%

53.5

13,096.9

1.1%

301.5

1.4%

43.4

Mechel-Fund

7,774.3

0.7%

97.7

0.4%

79.6

NPF Metallurgov

1,176.1

0.1%

16.2

0.1%

72.5

276.8

0.0%

2.1

0.0%

129.5

10.1 Other NPF’s

130,271.6

11.3%

2,668.8

12.1%

48.8

10.2 Non-state NPF’s (excl. RGS)

703,216.2

61.2%

2,668.8

65.3%

48.9

1,149,266.4

100.0%

22,041.2

100.0%

52.1

Uniliks Group 1 NPF

TPP Fund

All NPF’s Source: Bank of Russia, our calculations

3 Groups based on media reports, information provided by NPF’s and expert analysis

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Figure 2.1. Pension Savings by NPF Other NPF's 11%

Figure 2.2. Insured Parties by NPF

Quasi-state 21%

Other NPF's 12%

Uniliks 2%

ALOR 22%

Uniliks 2%

Renova 3%

Renova 2%

BIN 4%

Sun 5%

Sun 6%

Otkritie 20%

RGS 6%

Otkritie 16%

RGS 8% О1 13%

О1 13%

ALOR 15%

Source: Bank of Russia, our calculations

Quasi-state 15%

Source: Bank of Russia, our calculations

Based on figures from the PFR and VEB, the 2013-2014 campaign led to some R400bn in new resources being placed under (guaranteed) management by non-state pension funds. Bank of Russia data to mid-2015 should reflect the impact of “unfreezing” pension savings, which could significantly alter the market positions of specific funds and groups.

Figure 2.3. Map of Major NPF’s by Number of Insured Persons, Total Savings and Average Clients Balance Total pension savings, RUR bn 325

275

Quasi-state 73.683 Otkritie 63.414

Average account balance (RUR ‘000) 225

ALOR 36.076

175

O1 54.786 125

Renova 60.475 25

Uniliks 53.468

0.0

0.5

BIN 40.921

1.0

RGS Sun 42.965 43.124

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

Insured persons, ‘000 Source: our calculations

P E N S I O N SAV I N G S I N R U S S I A . 2 014

3. Returns on Pension Savings Returns are clearly the key measure by which the performance of non-state pension funds is assessed. Our analysis looks at “net returns”, i.e. returns actually paid into the accounts of insured parties after subtracting remuneration paid to funds themselves, as well as аsset management companies and specialised depositories. This report presents figures for the return on invested pension savings at 56 NPF’s covering some 86.3% of all individuals served by non-state pension funds and responsible for managing more than 84.6% of all pension savings held by NPF’s.4 Russian legislation establishes specific procedures for the investment of pension savings: they may only be invested in “permitted asset classes”, limits are imposed on portfolio diversification and exposure to individual issuers, and all transactions with securities must take place on exchange. The Central Bank strictly regulates which banks are authorised to hold deposits and current accounts that contain pension savings. In 2014 NPF’s reported an average return of 4.81% per annum. Individuals who made no choice of NPF and whose pension savings therefore formed part of VEB’s expanded portfolio saw a return of 2.6%. Individuals who chose to place their pension savings with a private management company’s investment fund saw a return of 1.04%. Last year’s performance was shaped above all by the re-evaluation of securities at year’s end. NPF’s have invested as much as half of all pension savings in federal, regional and local government debt or corporate bonds. In the case of VEB, bonds of various types account for close to 80% of the portfolio. Interestingly, NPFs’ cumulative returns since 2009 have been considerably stronger and on average slightly exceeded inflation (58.67% versus 58.65%). They are also well above the cumulative return on VEB’s expanded portfolio (44.25%).

4 As of the date of this report the remaining NPF’s had not yet provided information on their returns or published it on their websites, nor was the information available in other sources that the author of this report considers reliable.

It is important to note that information published quarterly by the Bank of Russia on the returns earned by NPF’s does not reflect actual returns to the accounts of insured parties and so cannot be used to assess the return on pension savings.

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Table 3.1. Annual Returns – NPF’s №

Year

2005

2006

2007

2008

VEB (government debt) VEB (expanded portfolio)

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

2010

2011

2012

2013

2014

4.73%

4.11%

6.94%

6.90%

–2.16%

8.71%

4.67%

4.99%

–0.43%

9.05%

6.95%

4.24%

8.41%

6.71%

2.56%

Inflation

10.92%

9.00%

11.87%

13.28%

8.80%

8.78%

6.10%

6.57%

6.47%

11.35%

1 NPF Avtovaz Adekata-Pension Akvilon Almaznaya Osen Atomgarant Bashkortostan BIG Vladimir VNIIEF-GARANT Volga-Capital VTB Pension Fund Gazfond Pension Savings Gefest Doverie Doverie (Orenburg) European Zashchita budushchego Imperia KIT Finance Lukoil-Garant OAO Magnit Nasledie Neftegarant AO New Age NPF of Sberbank NPF of Electric Power Industry Obrazovanie Education & Scince DIF Povolzhsky Promargofund Raiffeisen RGS Regionfund Rostvertol Russian Standard St. Petersburg Sberegatelny SLP Soglasiye OAO Sunny Coast Social Development Social World Sotsium StalFond Surgutneftegaz OAO Telekom-Soyuz CIP fund UMMC-Perspective Uraloboronzavodsky Uralsib UFD Uchastiye Khanty-Mansiysk Zerich

22.30%

18.60%

9.94%

0.00%

18.63%

10.90%

1.19%

5.80%

0.00% 7.60%

10.46% 10.70%

4.92% 6.10%

0.00% 0.00% 0.00%

28.93% 1.68% 18.10%

11.04% 8.98% 9.92%

14.90% 7.15% 10.70% 17.00%

17.90% 4.23% 17.10% 19.01%

6.40% 6.35% 8.12% 7.50%

16.35%

15.48% 16.58% 10.00%

3.96% 6.78% 8.00%

0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 5.24% 0.00% 5.70%

24.40% 21.30% 10.00% 8.00% 16.03% 22.60% 13.02% 24.60% 27.93% 18.23%

9.90% 12.30% 10.00% 9.00% 9.23% 9.24% 11.04% 9.00% 12.03% 27.10% 5.00% 9.98% 10.55% 9.80% 9.34% 7.36% 8.99% 9.27% 10.51% 12.03% 15.00% 16.01% 9.57% 10.00% 10.82% 11.35% 10.50% 8.77%

5.30% 5.17% 8.40% 5.93% 3.90% 6.72% 3.77% 7.25% 7.46% 6.17% 4.84% 5.94% 6.39% 6.43% 7.54% 6.41% 6.56% 8.50% 1.70% 6.63% 6.65% 12.16% 6.39% 6.89% 4.73% 6.72% 7.21% 8.40% 7.62% 7.23% 8.14% 4.46% 6.33% 6.22% 7.43% 7.09% 6.93% 7.14% 8.50% 6.19% 11.44% 7.03% 5.67% 6.53% 5.74% 6.09% 6.45% 5.74% 5.63% 5.98% 6.82% 7.10% 6.61% 7.27% 6.61% 6.00%

3.13% 3.99% 6.87% 4.99% 2.15% 4.70% 36.88% 6.15% 5.40% 1.20% 6.20% 4.41% 2.72% 0.27% 7.27% 4.47% 10.87% 6.81% 0.00% 2.06% 6.49% 2.50% 0.00% 5.84% 0.02% 2.40% 7.18% 5.91% 5.10% 6.48% 5.89% 0.67% 3.74% 7.53% 2.30% 5.87% 11.20% 2.04% 6.72% 6.93% 9.84% 3.19% 0.47% 3.61% 11.14% 6.49% 0.88% 2.71% 2.13% 2.19% 2.56% 2.10% 0.00% 6.27% 0.44% 0.00%

Average across funds Number of funds Source: Bank of Russia, Rosstat, PFR, our calculations

2009 0.97%

12.03%

15.18%

9.53%

10.35% 0.00%

21.30%

18.00% 20.10%

7.42% 5.68%

0.00% –0.64%

11.85%

16.64%

0.00% 4.25%

0.00% 0.00% 0.00%

17.02%

7.61%

11.14% 8.27%

18.70% 12.38%

7.88% 5.73%

0.00% 7.30% 5.26% 0.00% 0.00%

9.60%

13.90%

4.70%

0.00%

24.14% 17.26% 20.07% 20.00% 12.94% 13.84% 27.18% 30.02% 12.12% 27.13% 15.20% 40.54% 18.04% 14.07% 10.46% 31.91% 15.50% 1.61%

15.53%

24.31%

5.37%

0.00%

17.83%

12.84%

0.00% 0.82% 1.33% 15.00% 2.82% 1.01% 0.96% 0.25% 0.48% 0.93% 1.50% 7.90% 3.01% 6.70% 0.00% 1.34% 0.00% 1.99% 0.00% 0.00% 4.58% 0.78% 0.00% 2.01% 3.40% 7.00% 0.00% 5.01% 2.84% 0.00% 3.02% 1.81% 3.25% 8.00% 3.15%

12.50%

1.36% 7.63% 4.66% 0.60% 0.00% 1.43% 2.37% 1.28% 1.88% 6.58% 0.26% 1.75% 0.60% 0.87% 0.00% 2.17% 0.00%

10.00% 0.38% 5.58% 6.40% 9.00% 7.67% 8.58% 7.61% 7.00% 8.68% 7.73% 7.01% 9.87% 4.82% 6.62% 5.50% 6.00% 6.70% 7.57% 9.74% 6.75% 6.99% 5.79% 7.03% 7.75% 9.58% 10.10% 6.99% 5.07% 3.55% 6.75% 7.99% 7.13% 6.42% 9.00% 7.10% 8.05% 7.68% 11.21% 6.82% 6.10% 7.03% 8.17% 6.01% 9.87% 7.35% 7.31% 6.39% 6.05% 7.50% 1.86% 7.84% 6.80% 5.53%

22.60% 21.07% 16.01% 21.50%

0.00% 5.90% 10.63% 11.88% 8.50%

24.79% 10.46% 18.50% 15.84% 13.10% 20.00%

10.09% 0.00% 17.30% 0.00% 5.42% –32.61% 5.35% 0.00% 5.50% 0.00% 14.60% 5.04%

16.40%

15.10%

13.14%

0.00%

12.50% 0.70%

11.85% 12.66% 7.24% 9.10% 13.25% 9.59% 11.00% 9.42% 11.59% 21.84% 10.70% 10.50% 11.59% 19.13% 7.83% 10.81% 5.60%

14.61%

16.51%

7.33%

0.45%

18.49%

11.02%

2.37%

7.09%

6.61%

4.81%

22.60% 12.11% 41.00%

16.20% 12.70%

11.97% 0.00% 0.00% 0.00% 0.00%

10.07% 10.60% 9.20% 11.88% 21.00% 43.55% 25.74% 11.07% 47.40% 10.00% 18.00% 20.23%

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Figure 3.1. Map of Major NPF’s by Cumulative Returns (2009-2014), Total Savings and Average Clients Balance Pension savings, RUR trillion 3.0

Lukoil-Garant 60.1

2.5

Average account balance (RUR ‘000)

KIT Finance 32.5

2.0 Promagrofond 30.8

1.5

1.0

RGS 42.9

NPF Elektroenergetiki 66.7 VTB Pension Fund 64.7

Naslediye 47.0

NPF Sberbank 70.1 StalFond 37.1

SLP 41.5 Gazfond PS 85.6

0.5

BIG 56.6

Sunny Coast 60.8

0.0

‒0.5 35%

European 61.3

Raiffeisen 117.3

45%

55%

65%

75%

85%

95%

105%

Cumulative Returns, 2009-2014 Source: our calculations

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Table 3.2. Ranking of NPF’s by returns, 2014 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

Bashkortostan Inflation Russian Standard Sotsium European Soglasiye OAO RGS Doverie NPF of Electric Power Industry SLP Adekata-Pension Zashchita budushchego Sberegatelny Lukoil-Garant OAO StalFond DIF Uchastiye Volga-Capital BIG Obrazovanie Povolzhsky Rostvertol Neftegarant AO Vladimir Education & Scince Akvilon Average Atomgarant Doverie (Orenburg) VTB Pension Fund Avtovaz Raiffeisen Social World Sunny Coast 1 NPF Gazfond Pension Savings Telekom-Soyuz VEB (expanded portfolio) Uraloboronzavodsky Magnit NPF of Sberbank Regionfund UMMC-Perspective Almaznaya Osen CIP fund Uralsib KIT Finance St. Petersburg VNIIEF-GARANT Surgutneftegaz OAO Promargofund Social Development Khanty-Mansiysk Gefest New Age Imperia Nasledie UFD Zerich VEB (government debt)

Sourc e: Bank of Russia, Rosstat, PFR

Table 3.3. Ranking by cumulative returns, 2009-2014 36.88% 11.35% 11.20% 11.14% 10.87% 9.84% 7.53% 7.27% 7.18% 6.93% 6.87% 6.81% 6.72% 6.49% 6.49% 6.48% 6.27% 6.20% 6.15% 5.91% 5.89% 5.87% 5.84% 5.40% 5.10% 4.99% 4.81% 4.70% 4.47% 4.41% 3.99% 3.74% 3.61% 3.19% 3.13% 2.72% 2.71% 2.56% 2.56% 2.50% 2.40% 2.30% 2.19% 2.15% 2.13% 2.10% 2.06% 2.04% 1.20% 0.88% 0.67% 0.47% 0.44% 0.27% 0.02% 0.00% 0.00% 0.00% 0.00% –2.16%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60

European DIF UMMC-Perspective Surgutneftegaz OAO RGS Doverie Obrazovanie Bashkortostan Education & Scince BIG Doverie (Orenburg) Vladimir CIP fund Telekom-Soyuz Magnit NPF of Sberbank Lukoil-Garant OAO Soglasiye OAO StalFond Povolzhsky St. Petersburg Akvilon Gazfond Pension Savings Average Inflation Sotsium UFD NPF of Electric Power Industry Atomgarant SLP Uralsib New Age Neftegarant AO VTB Pension Fund Regionfund 1 NPF KIT Finance Social World Sunny Coast Khanty-Mansiysk Gefest VEB (expanded portfolio) Raiffeisen Uraloboronzavodsky Imperia VNIIEF-GARANT Volga-Capital Promargofund Nasledie Russian Standard Rostvertol Social Development Uchastiye Adekata-Pension Almaznaya Osen Sberegatelny VEB (government debt) Zashchita budushchego Zerich Avtovaz

Source: Bank of Russia, Rosstat, PFR, our calculations * Some funds have been investing pension savings for less than 6 years

101.96% 99.17% 88.50% 87.70% 86.64% 85.73% 85.27% 78.05% 76.53% 72.31% 72.03% 69.22% 66.97% 66.66% 66.23% 66.16% 65.39% 65.06% 64.67% 63.41% 60.58% 59.83% 59.13% 58.67% 58.65% 58.09% 56.89% 56.49% 56.39% 55.95% 55.71% 54.80% 54.71% 53.09% 52.99% 52.95% 49.75% 46.10% 45.77% 45.65% 45.47% 44.25% 44.14% 43.68% 42.40% 41.24% 40.60% 40.52% 40.25% 39.98% 37.68% 36.74% 32.56% 27.43% 25.19% 25.11% 23.14% 22.26% 18.95% 9.37%

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Table 3.4. Ranking of Asset Management Companies by Returns, 2014 1

Inflation

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Finam Management Metropol Analytical Center Metalloinvesttrust MDM Region Trust Ingosstrakh-Investments Solid Management Otkritie BIN Finam Group BFA Captain VEB (expanded portfolio) Leader Natsionalnaya Pension Saving Company OFG Invest VTB Capital Pension Reserve RFC-Capital Promsvyaz Average (for private investment companies) Region ESM Ak Bars Capital BKS (balanced) TKB BNP Paribas Investment Partners Trinfiko (conservative capital protection) Trinfiko (balanced) Region Portfolio Investments VTB Capital Asset Management Uralsib Management Company Sberbank Asset Management Pallada Aton-Management Agana (conservative) Trinfiko (long-term growth) VEB (government debt) BKS (high revenue) Agana (balanced) Alfa-Capital UM Monomakh

Source: PFR, Rosstat, our calculations

Table 3.5. Ranking of Asset Management Companies by Cumulative Returns, 2009-2014 11.35%

7.41% 6.04% 4.98% 4.28% 4.03% 3.91% 3.85% 3.84% 3.21% 2.95% 2.73% 2.57% 2.56% 2.28% 2.24% 1.92% 1.86% 1.83% 1.73% 1.27% 1.04% 1.00% 0.87% 0.83% 0.81% 0.58% 0.54% 0.50% 0.05% –0.57% –0.66% –0.73% –0.80% –1.55% –1.68% –2.16% –2.52% –2.86% –3.53% –3.80% –10.06%

Solid Management

131.28%

2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42

Sberbank Asset Management Region Portfolio Investments RFC-Capital VTB Capital Asset Management MDM Agana (balanced) Analytical Center Monomakh TKB BNP Paribas Investment Partners Metropol Trinfiko (long-term growth) BKS (high-revenue) Captain Pension Saving Company Region ESM Trinfiko (balanced) Average (for private investment companies) BFA VTB Capital Pension Reserve Pallada BKS (balanced) Ak Bars Capital Metalloinvesttrust Region Trust Inflation Uralsib Management Company Promsvyaz BIN Finam Group Aton-Management Ingosstrakh-Investments Leader Otkritie UM OFG Invest VEB (expanded portfolio) Finam Management Natsionalnaya Alfa-Capital Agana (conservative) VEB (government debt) Trinfiko (conservative capital protection)

124.40% 116.47% 113.67% 108.48% 99.89% 94.10% 87.22% 86.67% 85.14% 80.38% 80.10% 79.12% 78.89% 77.12% 73.45% 73.03% 68.85% 68.80% 66.11% 65.48% 65.06% 64.23% 60.25% 59.14% 58.65% 55.95% 55.78% 54.56% 53.36% 53.12% 52.50% 51.38% 46.53% 46.39% 43.70% 41.64% 39.32% 31.18% 26.58% 21.71% 20.29%

Source: PFR, Rosstat, our calculations

P E N S I O N SAV I N G S I N R U S S I A . 2 014

4. The Structure of Invested Pension Savings Most pension savings (based on all accounts managed by VEB, private investment companies and NPF’s) have been invested in bonds. Over the past five years the share of corporate bonds has risen, offset by a decline in the share of federal government debt. As of 31 December 2014 bonds of all types accounted for 66.4% of the total, including 34.9% invested in private-sector debt instruments.

Figure 4.1. Structure of Invested Pension Savings

31.2%

29.0%

41.2% 58.6%

52.7% 2.4%

68.4% 79.1%

80.5%

83.2%

80.7%

2.5%

2.4%

86.9% 1.8%

21.6%

19.5%

1.6% 2.0%

33.4%

34.9%

2.9% 2.1%

5.3% 2.5%

2.4%

0.6% 0.3% 0.6% 0.2% 17.3%

1.2% 0.8% 0.7% 0.2% 15.0%

1.7% 1.6% 1.8% 0.2% 9.4%

1.5% 3.7% 2.7% 0.3% 9.2%

1.9%

1.6%

2.0%

1.6% 4.8% 1.4% 1.2% 1.1% 3.0%

2004

2005

2006

2007

2008

2.0% 7.1% 1.8% 2.2% 4.3% 11.9%

19.0% 1.8% 2.6%

1.1% 2.4%

22.1%

14.6%

13.3%

20.9%

9.3%

2.4%

2.7% 3.6%

6.2% 3.0%

6.0% 3.1%

2009

2010

2011

2012

10.3% 3.1%

1.1% 3.7%

2013

2014

Federal government debt

Private-sector bonds

Current accounts

Regional government debt

Mortgage securities

Deposits

Other assets

Source: Bank of Russia, PFR, our calculations

Bank deposits have become more attractive against a background of highly volatile financial markets and by the end of 2014 their share of the aggregate portfolio had risen to 21%. Above all this reflects legally-mandated advantageous terms for the deposit of pension savings: the list of banks authorised to handle such funds is controlled by the Bank of Russia and interest is due in full even if funds are withdrawn ahead of schedule. All players in the market for managing pension savings have shown interest in bank deposits.

Table 4.1. Share of bank deposits in portfolios held by NPF’s, VEB and Asset management companies, 31.12.2014 Share of deposits in total investment portfolio

Total 20,9%

NPF’s VEB Asset management companies 31,8% 14,8% 10,0%

Source: Bank of Russia, PFR, our calculations

In 2015 the Central Bank announced its intention to adjust the caps imposed on investments in the banking sector. In particular, for NPF’s the cap on banking sector assets would be lowered from the current 80% to 40% of the total investment portfolio by the end of the year. This suggests that the structure of invested pension savings will shift further towards corporate and infrastructure bonds.

P E N S I O N SAV I N G S I N R U S S I A . 2 014

In the case of NPF’s alone, federal government debt consistently accounts for only a small portion of the aggregate portfolio, while holdings of non-state bonds have been rising in recent years and as of 31 December 2014 made up 39.2% of the total. A new asset class – mortgage securities – accounted for 7.1%. Share holdings have held stable at 6-7% of the total in recent years.

Figure 4.2. Structure of Investment Portfolios – NPF’s 6.8%

3.2%

3.4%

14.2%

12.0%

7.4%

20.6%

1.1% 9.1%

4.9%

2.8%

4.9%

6.1%

7.0%

6.0%

2.4% 5.7%

16.7% 27.7% 34.0% 36.2%

33.1% 37.8% 26.4%

10.0%

0.5% 6.1%

27.1%

4.5% 0.8% 7.0%

7.4%

1.1% 2.5% 7.5%

2005

2006

2007

10.6% 3.5% 13.3% 2008

0.5% 12.2%

16.4%

2.6% 6.1%

7.1% 6.9%

9.6% 38.9%

22.5%

8.0%

0.1%

39.2%

30.2% 31.8%

23.5%

7.4%

7.0%

7.3%

9.8%

6.5%

5.1%

3.9%

3.3%

3.5%

2.4% 5.5%

2009

2010

2011

2012

2013

2014

Federal government debt

Private-sector bonds

Current accounts

Regional government debt

Mortgage securities

Deposits

Other assets

Source: Bank of Russia, our calculations

11.2%

11.4%

24.1%

45.0% 0.3% 6.3%

0.2% 0.4%

25.0%

48.1%

44.0%

36.8%

P E N S I O N SAV I N G S I N R U S S I A . 2 014

VEB’s portfolio has traditionally been dominated by OFZ’s, although in recent years their share of the total has gradually declined, reaching 45.4% at the end of 2014. Investments in non-state bonds have become considerably more important: this category includes debt issued by major state-sector enterprises and infrastructure bonds.

Figure 4.3. Structure of Investment Portfolios – VEB

44.7%

45.4%

0.4%

31.3%

31.8%

3.1%

4.2%

57.5% 71.9% 80.8%

83.2%

67.6%

80.4% 88.5%

88.6% 97.2% 0.3% 0.3%

17.5%

15.5%

11.4%

1.6% 2.1% 1.4%

12.2%

1.4%

12.8%

6.0%

5.4%

2.7%

3.1%

2.8%

0.4% 3.0%

2011

2012

2013

2014

2.1%

1.7%

1.3%

1.7%

1.5%

0.9% 1.9%

1.7%

2004

2005

2006

2007

2008

2009

2010

9.9%

10.5%

2.2% 15.6%

7.0% 10.7%

14.8%

Federal government debt

Private-sector bonds

Current accounts

Regional government debt

Mortgage securities

Deposits

Other assets

Sourc e: PFR, our calculations

0.8%

7.9% 1.7% 3.3%

9.8%

16.0%

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Pension savings portfolios controlled by private asset management companies consist mainly of corporate bonds (62.5% of the total). Given negative trends in equity over the past few years, asset managers have preferred to take a conservative approach and held share holdings to no more than 2.9%. â&#x20AC;&#x192;

Figure 4.4. Structure of Investment Portfolios â&#x20AC;&#x201C; Private Management Companies 18.0%

15.1%

4.7%

10.9%

11.2%

5.5%

11.9%

15.5%

6.5% 8.5%

7.6%

7.8%

6.5%

12.0%

12.2%

14.7%

13.6%

23.0% 21.3%

2.6% 13.1%

26.0% 40.4% 23.7%

14.5%

48.3% 45.4%

33.9%

52.4%

48.6% 57.8%

23.1%

62.5%

21.4% 19.2%

28.6%

30.2%

0.6% 15.9%

25.1%

6.1%

17.8%

13.7%

5.0% 3.4%

8.5%

7.9%

9.7%

6.1% 1.5%

8.9% 2004

9.1%

7.1% 0.8% 5.9%

7.4% 1.9% 4.4%

2005

2006

2007

10.0% 1.2% 6.5%

5.6% 2.0% 6.7%

5.2% 1.6% 5.1%

2008

2009

2010

6.4%

4.9% 4.1%

2011

2012

9.0%

2.9%

1.9% 3.5%

10.0% 0.6% 2.8%

2013

2014

Federal government debt

Private-sector bonds

Current accounts

Regional government debt

Mortgage securities

Deposits

Other assets

Sourc e: PFR, our calculations

25.4%

P E N S I O N SAV I N G S I N R U S S I A . 2 014

5. Moscow Exchange Pension Asset Indices The primary benchmarks used in comparing returns on invested pension savings are the pension asset indices provided by the Moscow Exchange. These indices are compiled for various possible pension portfolios, in accordance with aggressive (RUPAI), balanced (RUPMI) or conservative (RUPCI) strategies. Two other indices reflect changes in market quotes for shares open to NPF’s that invest pension savings (the EPSI sub-index) and allowable federal government bonds (OPSI, a sub-index for OFZ’s). The Central Bank followed an active monetary policy in 2014, frequently changing its key lending rate. This was reflected in the price of financial assets and in the behaviour of market players.

Figure 5.1. Pension Asset Indices (from 2007)

Figure 5.2. Pension Asset Indices (from 01.01.2014)

1 800

25%

1 600

20%

16.12.2014 Key lending rate: 17.0%

03.03.2014 Key lending rate: 7.0%

15%

1 400

10%

1 200

5% 1 000 0% 800 ‒5% 600

‒10%

400

‒15%

200 0

‒20% ‒25%

Jan 2014

2007 2008 2009 2010 2011 2012 2013 2014

RUPAI

RUPMI

RUPCI

EPSI

Source: Moscow Exchange

RUPAI

OPSI

May 2014

Sep 2014

RUPMI

Jan 2015

RUPCI

Source: Moscow Exchange, Bank of Russia, our calculations

All of the indices were negative at the end of last year. The actual performance achieved by NPF’s, VEB and private asset management companies was stronger, however, which indicates active management of their pension savings portfolios over the course of 2014.

Table 5.1. Growth in Pension Asset Indices from Start of Year Index PAI PMI PCI EPSI OPSI

2008 –49.7% –27.6% –2.1% –72.6% –5.9%

Sourc e: Moscow Exchange, our calculations

2009 77.4% 42.9% 22.5% 153.6% 9.7%

2010 35.4% 23.4% 11.7% 56.4% 6.4%

2011 –7.8% –1.4% 4.6% –18.4% 4.1%

2012 6.1% 6.6% 7.2% 5.1% 9.8%

2013 3.8% 5.9% 8.1% 1.4% 5.8%

2014 –1.8% –1.0% –0.3% –6.5% –6.5%

May 2015

EPSI

Sep 2015

OPSI

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Appendix 1. Key Indicators for NPF’s in the Pension Savings Market* NPF 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Lukoil-Garant OAO (Otkritie) Future (O1) NPF of Sberbank (Quasi-state) NPF of Electric Power Industry (Otkritie) RGS VTB Pension Fund (Quasi-state) KIT Finance (ALOR) Gazfond Pension Savings (Quasi-state) Promargofund (ALOR) Nasledie (ALOR) StalFond (O1) SLP (Sun) BIG (Renova) Sunny Coast (Sun) European (BIN) Raiffeisen Natsionalny 1 NPF (Uniliks) Sotsium Doverie (BIN) Regionfund (BIN) Khanty-Mansiysk (Quasi-state) Magnit Mechel-Fund (Uniliks) Social Development Transneft (Quasi-state) 1st Russian Obrazovanie Soglasiye OAO UMMC-Perspective Atomgarant (Quasi-state) Adekata-Pension (Sun) Neftegarant AO (Quasi-state) Strategy DIF (Quasi-state) Uralsib Blagovest Doverie (Orenburg) Surgutneftegaz OAO Russian Standard Volga-Capital Vladimir (Renova) Sberegatelny (Sun) Blagodenstvie Stroycomplex Almaznaya Osen (Quasi-state) Gefest Arel Zerich Siberian Capital OAO 1st Industrial Alliance Telekom-Soyuz (O1) Uraloboronzavodsky (Sun)

* From 31.03.2015

Pension savings, RUR bn 152.47 114.84 75.99

13.27% 9.99% 6.61%

Total pension assets (RUR bn) 174.22 114.84 86.59

Pension savings as % of Total 88% 100% 88%

insured individuals, ‘000 2 481 1 785 1 059

Market share by number insured 11.26% 8.10% 4.80%

Average pension account balance, ‘000 RUR 61.4 64.3 71.8

74.11

6.45%

113.42

65%

1 092

4.95%

67.9

71.83 70.05 66.11

6.25% 6.09% 5.75%

72.14 71.16 66.20

100% 98% 100%

1 672 1 069 1 977

7.59% 4.85% 8.97%

43.0 65.5 33.4

64.46

5.61%

64.46

100%

733

3.33%

87.9

54.79 50.08 37.08 34.32 27.55 15.94 15.91 15.41 13.76 13.10 12.83 12.42 11.10 10.50 9.58 7.77 7.71 6.50 6.09 5.29 5.22 4.90 4.89 4.72 4.42 4.34 4.09 3.95 3.84 3.73 3.42 3.27 3.02 2.85 2.77 2.58 2.52 2.16 2.08 2.04 2.03 1.84 1.79 1.70 1.18

4.77% 4.36% 3.23% 2.99% 2.40% 1.39% 1.38% 1.34% 1.20% 1.14% 1.12% 1.08% 0.97% 0.91% 0.83% 0.68% 0.67% 0.57% 0.53% 0.46% 0.45% 0.43% 0.43% 0.41% 0.38% 0.38% 0.36% 0.34% 0.33% 0.32% 0.30% 0.28% 0.26% 0.25% 0.24% 0.22% 0.22% 0.19% 0.18% 0.18% 0.18% 0.16% 0.16% 0.15% 0.10%

55.49 64.43 41.19 34.33 29.92 15.94 16.13 20.22 25.14 16.19 14.35 12.69 15.04 26.69 9.59 9.29 10.34 65.86 6.10 5.62 5.22 6.38 13.00 4.74 4.42 6.88 5.40 4.26 4.70 3.96 14.26 3.27 3.89 6.04 2.79 3.79 3.46 12.77 2.37 2.22 2.03 1.84 4.33 23.01 1.25

99% 78% 90% 100% 92% 100% 99% 76% 55% 81% 89% 98% 74% 39% 100% 84% 75% 10% 100% 94% 100% 77% 38% 99% 100% 63% 76% 93% 82% 94% 24% 100% 78% 47% 99% 68% 73% 17% 88% 92% 100% 100% 41% 7% 95%

1 738 1 024 998 822 473 257 247 129 323 302 275 401 319 137 213 98 140 49 195 143 176 65 57 182 75 87 80 59 86 107 20 108 58 30 80 63 46 36 35 40 62 46 41 21 29

7.89% 4.65% 4.53% 3.73% 2.15% 1.16% 1.12% 0.58% 1.47% 1.37% 1.25% 1.82% 1.45% 0.62% 0.96% 0.44% 0.64% 0.22% 0.88% 0.65% 0.80% 0.30% 0.26% 0.82% 0.34% 0.39% 0.36% 0.27% 0.39% 0.48% 0.09% 0.49% 0.26% 0.13% 0.36% 0.28% 0.21% 0.17% 0.16% 0.18% 0.28% 0.21% 0.18% 0.09% 0.13%

31.5 48.9 37.2 41.8 58.2 62.1 64.4 119.8 42.6 43.4 46.6 31.0 34.8 76.6 45.1 79.6 55.0 133.3 31.3 36.9 29.7 75.2 85.7 26.0 58.6 50.0 50.9 66.7 44.6 35.0 175.2 30.3 51.9 96.3 34.8 41.1 54.5 59.3 59.3 50.5 32.7 39.8 44.0 81.5 41.2

Market share (by savings)

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Appendix 1. Key Indicators for NPF’s in the Pension Savings Market* (continue) NPF 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 84 85 86 87

NPF Metallurgov (Uniliks) UFD DIC Akvilon Uchastiye Education & Scince (BIN) Rostvertol (Quasi-state) Professional New Age St. Petersburg Captain Bashkortostan Mosenergo Pravo CIP fund (Uniliks) Pension-Invest VNIIEF-GARANT (Quasi-state) Avtovaz Siberian Savings The Quiet Don Vremya Povolzhsky APK-Fond Doroga Sunny Time (Sun) Allianz Imperia Social World RPF Moskovia Zashchita budushchego (Sun) Garant-Prof Rodnik Sberfund Total Top 10 Top 20

Pension savings, RUR bn 1.18 1.01 0.91 0.87 0.81 0.81 0.66 0.59 0.57 0.57 0.54 0.51 0.41 0.33 0.28 0.28 0.23 0.22 0.20 0.19 0.18 0.17 0.16 0.14 0.11 0.09 0.08 0.06 0.05 0.04 0.03 0.02 0.01 0.01 1,149.27 794.72 993.05

Market share (by savings) 0.10% 0.09% 0.08% 0.08% 0.07% 0.07% 0.06% 0.05% 0.05% 0.05% 0.05% 0.04% 0.04% 0.03% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.02% 0.01% 0.01% 0.01% 0.01% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 69.15% 86.41%

Total pension assets (RUR bn) 2.27 1.13 1.53 1.71 1.18 0.94 1.46 3.62 0.79 1.65 1.08 0.51 0.82 0.34 1.92 0.57 2.81 1.32 0.24 0.20 0.31 0.26 0.28 0.40 0.30 0.78 0.31 0.13 0.10 0.04 0.03 0.07 0.07 0.01 2,072.40 1,596.64 1,863.77

Pension savings as % of Total 52% 89% 60% 51% 68% 85% 45% 16% 73% 34% 49% 100% 50% 98% 14% 48% 8% 17% 85% 97% 59% 66% 54% 34% 37% 11% 26% 43% 52% 100% 99% 24% 18% 64% 55% 50% 53%

‘000 insured individuals 16 23 15 11 9 17 12 8 16 5 6 10 8 10 2 3 3 3 4 4 3 5 3 3 1 1 1 0 0 1 0 0 0 0 22,041 14,895 19,046

* From 31.03.2015 Source: Bank of Russia, our calculations

Explanation: Names in bold indicate funds that belong to a group of NPF’s Names in blue indicate funds that have joined the pension guarantee programme (as of 26.06.2015)

Market share by number insured 0.07% 0.10% 0.07% 0.05% 0.04% 0.08% 0.05% 0.04% 0.07% 0.02% 0.03% 0.04% 0.04% 0.04% 0.01% 0.01% 0.01% 0.01% 0.02% 0.02% 0.01% 0.02% 0.01% 0.01% 0.01% 0.00% 0.01% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 67.58% 86.41%

Average pension account balance, ‘000 RUR 72.5 44.1 61.5 81.7 86.3 48.7 56.3 74.2 35.5 106.6 93.0 53.7 49.9 33.4 129.5 94.1 79.4 74.6 54.5 43.2 61.3 37.4 57.6 44.2 92.7 113.7 67.7 119.8 141.9 62.1 74.1 46.6 158.5 154.6 52.1 53.4 52.1

P E N S I O N SAV I N G S I N R U S S I A . 2 014

Appendix 2. NPFs’ Cumulative Returns on Invested Pension Savings №

Cumulative from the year: VEB (government debt) VEB (expanded portfolio) Inflation

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

Источник: Банк России, собственные расчеты

2005

2006

2007

2008

2009

2010

2011

2012

2013

21.96% 32.27% 45.82%

16.45% 23.67% 34.05%

11.85% 18.64% 26.34%

4.59% 9.44% 18.55%

14.89%

8.60% 9.37% 15.85% 11.22% 6.13% 11.74% 42.04% 13.85% 13.26% 7.44% 11.34% 10.61% 9.28% 6.72% 15.36% 11.17% 18.14% 15.89% 1.70% 8.83% 13.57% 14.96% 6.39% 13.13% 4.75% 9.28% 14.91% 14.81% 13.11% 14.18% 14.51% 5.16% 10.31% 14.22% 9.90% 13.38% 18.91% 9.33% 15.79% 13.55% 22.41% 10.45% 6.17% 10.38% 17.52% 12.98% 7.39% 8.61% 7.88% 8.30% 9.55% 9.35% 6.61% 14.00% 7.08% 6.00% 1 1 .7 4 % 56

71.58% 143.08%

57.83% 119.15%

50.80% 101.05%

43.63% 79.72%

23.14% 44.25% 58.65%

143.91%

99.44%

68.16%

52.95%

28.93%

16.26%

85.23% 58.21%

85.23% 47.04%

67.69% 32.83%

59.83% 25.19% 56.39%

23.96% 23.12% 32.42%

148.36% 100.99% 97.96% 110.45%

116.15% 87.57% 78.83% 79.87%

83.34% 79.96% 52.71% 51.14%

122.28%

91.05% 90.57% 120.65%

65.44% 63.47% 100.59%

72.31% 69.22% 41.24% 40.60% 53.09% 59.13% 53.09% 85.73% 81.84%

72.31% 69.22% 41.24% 40.60% 53.09% 59.13% 45.47% 85.73% 72.03% 101.96%

38.51% 39.50% 28.40% 30.18% 31.94% 29.80% 28.71% 49.06% 34.47% 70.82% 14.71% 27.71% 37.75% 38.53% 24.18% 35.90% 21.72% 27.79% 39.58% 45.73% 53.24% 41.72% 38.43% 23.18% 30.49% 41.49% 32.46% 35.50%

133.75%

108.65%

81.15%

65.25% 65.39%

115.64%

77.77% 95.10%

50.65% 62.45%

40.25% 53.72%

112.84%

90.29%

66.16% 63.14%

66.16% 56.49% 85.27%

150.80%

114.33%

110.50% 85.43%

89.40% 71.27%

59.56% 52.40%

99.17% 75.34% 47.91% 44.14% 86.64%

79.95%

64.19%

44.15%

37.68%

42.40% 49.75% 65.39% 66.23% 40.25% 54.71% 54.80% 66.16% 56.49% 85.27% 76.53% 99.17% 63.41% 40.52% 44.14% 86.64% 52.99% 37.68%

143.01%

110.34%

69.21%

60.58%

36.28%

11.64% 12.97% 20.47% 78.05% 26.03% 24.22% 16.73% 19.43% 20.79% 18.82% 15.91% 36.76% 20.03% 34.40% 22.26% 9.25% 16.12% 24.60% 26.16% 13.57% 26.58% 11.68% 16.96% 26.30% 30.08% 33.25% 22.16% 26.34% 11.99% 17.75% 27.07% 19.87% 24.58% 39.98% 20.78%

55.95%

38.62% 65.06% 32.43% 23.63% 33.79% 41.30% 36.09% 30.75% 32.55% 50.33% 27.89% 30.62% 31.96% 30.49% 32.56% 29.47% 18.13% 34.44% 50

23.93% 46.51% 23.48% 13.32% 18.14% 28.94% 22.60% 19.50% 18.78% 23.38% 15.52% 18.21% 18.26% 9.54% 22.93% 16.84% 11.86% 22.48% 53

77.53% 95.68% 105.18% 117.08%

63.21% 44.80% 61.63% 76.87% 78.67%

63.21% 36.74% 46.10% 58.09% 64.67%

128.97% 116.34% 58.69% 75.34% 85.80% 126.63%

83.48% 95.86% 33.92% 51.37% 64.28% 88.86%

66.66% 66.97% 27.03% 43.68% 55.71% 64.80%

120.78%

89.68%

64.79%

45.65%

116.01% 21

94. 37% 30

66.76% 32

58.31% 39

117.65% 130.03% 206.08%

103.75% 109.40%

45.77% 36.74% 46.10% 58.09% 64.67% 87.70% 66.66% 66.97% 88.50% 43.68% 55.71% 56.89% 45.65% 18.95% 58.67% 48

27.43% 11.64% 12.06% 18.89% 54.82% 22.58% 22.98% 15.62% 19.13% 20.21% 17.73% 14.20% 26.74% 16.52% 25.96% 22.26% 7.80% 16.12% 22.17% 26.16% 13.57% 21.04% 10.82% 16.96% 23.81% 25.80% 24.53% 22.16% 20.32% 8.89% 17.75% 23.34% 17.74% 20.65% 29.61% 17.09% 25.11% 22.27% 36.13% 17.99% 12.64% 18.14% 27.12% 19.77% 17.99% 16.59% 15.77% 15.22% 16.17% 17.55% 8.59% 22.93% 14.36% 11.86% 19.75% 55

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Appendix 3. NPFs’ Annual Returns on Invested Pension Savings №

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56

Year: VEB (government debt) VEB (expanded portfolio) Inflation 1 NPF Avtovaz Adekata-Pension Akvilon Almaznaya Osen Atomgarant Bashkortostan BIG Vladimir VNIIEF-GARANT Volga-Capital VTB Pension Fund Gazfond Pension Savings Gefest Doverie Doverie (Orenburg) European Zashchita budushchego Imperia KIT Finance Lukoil-Garant OAO Magnit Nasledie Neftegarant AO New Age NPF of Sberbank NPF of Electric Power Industry Obrazovanie Education & Scince DIF Povolzhsky Promargofund Raiffeisen RGS Regionfund Rostvertol Russian Standard St. Petersburg Sberegatelny SLP Soglasiye OAO Sunny Coast Social Development Social World Sotsium StalFond Surgutneftegaz OAO Telekom-Soyuz CIP fund UMMC-Perspective Uraloboronzavodsky Uralsib UFD Uchastiye Khanty-Mansiysk Zerich Average across funds Number of funds

2005

2006

2007

2008 5.31% 8.74%

2009 3.53% 6.30% 8.00%

2010 4.05% 5.75% 7.84%

2011 3.88% 5.46% 7.60%

2012 3.80% 5.86% 8.11%

2013 2.27% 4.61% 8.88%

5.55% 9.29%

5.20% 9.11%

5.27% 9.12%

9.33%

7.97%

6.71%

6.26%

7.34%

5.21%

3.84%

4.74%

7.09% 4.38%

6.68% 3.61%

6.93% 3.26% 6.60%

8.13% 3.82% 7.74%

4.39% 4.25% 5.78%

9.52% 7.23% 7.07% 7.72%

8.94% 7.24% 6.67% 6.74%

7.87% 7.62% 5.43% 5.30%

8.32%

7.46% 7.43% 9.19%

6.49% 6.34% 9.09%

8.08% 7.80% 5.06% 4.99% 6.27% 6.86% 6.27% 9.25% 8.92%

9.49% 9.16% 5.92% 5.84% 7.36% 8.05% 6.45% 10.87% 9.46% 12.43%

6.73% 6.88% 5.13% 5.42% 5.70% 5.35% 5.18% 8.31% 6.10% 11.30% 2.78% 5.01% 6.61% 6.73% 4.43% 6.33% 4.01% 5.03% 6.90% 7.82% 8.91% 7.22% 6.72% 4.26% 5.47% 7.19% 5.78% 6.26%

4.21% 4.58% 7.63% 5.46% 3.02% 5.71% 19.18% 6.70% 6.43% 3.66% 5.52% 5.17% 4.54% 3.30% 7.40% 5.44% 8.69% 7.65% 0.85% 4.32% 6.57% 7.22% 3.15% 6.36% 2.35% 4.54% 7.19% 7.15% 6.35% 6.85% 7.01% 2.55% 5.03% 6.87% 4.83% 6.48% 9.04% 4.56% 7.61% 6.56% 10.64% 5.10% 3.04% 5.06% 8.41% 6.29% 3.63% 4.21% 3.87% 4.07% 4.66% 4.57% 3.25% 6.77% 3.48% 2.96% 5.67% 56

6.36% 4.69%

8.86%

8.52%

7.71%

7.44% 7.45%

7.99%

6.60% 7.71%

5.26% 6.25%

4.95% 6.33%

7.85%

7.41%

6.55% 6.31%

7.52% 6.61% 9.21%

10.76%

10.00%

7.73% 6.37%

7.35% 6.16%

6.01% 5.41%

10.34% 8.35% 5.75% 5.36% 9.32%

6.05%

5.66%

4.68%

4.67%

6.07% 6.96% 8.75% 8.84% 5.80% 7.54% 7.55% 8.83% 7.75% 10.82% 9.94% 12.17% 8.53% 5.83% 6.28% 10.96% 7.34% 5.47%

9.29%

8.61%

6.80%

7.00%

8.21%

6.39%

2.79% 3.10% 4.77% 15.51% 5.96% 5.57% 3.94% 4.54% 4.84% 4.41% 3.76% 8.14% 4.67% 7.67% 5.15% 2.24% 3.81% 5.65% 5.98% 3.23% 6.07% 2.80% 3.99% 6.01% 6.80% 7.44% 5.13% 6.02% 2.87% 4.17% 6.17% 4.64% 5.65% 8.77% 4.83%

7.69%

6.75% 10.54% 5.78% 4.33% 5.99% 7.16% 6.36% 5.51% 5.80% 8.49% 5.04% 5.49% 5.70% 5.47% 5.80% 5.30% 3.39% 6.05% 50

5.51% 10.02% 5.42% 3.18% 4.25% 6.56% 5.23% 4.55% 4.40% 5.39% 3.67% 4.27% 4.28% 2.30% 5.30% 3.97% 2.84% 5.13% 53

6.59% 7.74% 8.31% 8.99%

6.31% 4.74% 6.19% 7.39% 7.52%

7.25% 4.57% 5.57% 6.76% 7.39%

9.64% 8.95% 5.26% 6.44% 7.13% 9.52%

7.88% 8.77% 3.72% 5.32% 6.40% 8.27%

7.57% 7.60% 3.48% 5.31% 6.53% 7.40%

8.24%

7.37%

6.44%

5.52%

7.92% 21

7.59% 30

6.53% 32

6.71% 39

8.09% 8.69% 11.84%

7.38% 7.67%

6.48% 5.35% 6.52% 7.93% 8.67% 11.06% 8.89% 8.92% 11.14% 6.23% 7.66% 7.80% 6.47% 2.93% 7.91% 48

8.42% 3.74% 3.87% 5.94% 15.69% 7.02% 7.14% 4.96% 6.01% 6.33% 5.59% 4.52% 8.22% 5.23% 8.00% 6.93% 2.54% 5.11% 6.90% 8.05% 4.33% 6.57% 3.48% 5.36% 7.38% 7.95% 7.59% 6.90% 6.36% 2.88% 5.60% 7.24% 5.59% 6.46% 9.03% 5.40% 7.75% 6.93% 10.83% 5.67% 4.05% 5.71% 8.33% 6.20% 5.67% 5.25% 5.00% 4.84% 5.12% 5.54% 2.79% 7.12% 4.57% 3.81% 6.15% 55

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Appendix 4. Major NPF Investors by Asset Class Top 20 NPF’s by holdings of federal government bonds, 31.12.2014 NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Nasledie NPF of Sberbank Khanty-Mansiysk Gazfond Pension Savings Future Promargofund VTB Pension Fund KIT Finance BIG Zerich UFD UMMC-Perspective Lukoil-Garant OAO 1 NPF Magnit Atomgarant RGS Education & Scince Russian Standard Transneft Share of top 5 Share of top 10 Share of top 20

Top 20 NPF’s by holdings of non-state bonds, 31.12.2014

Share of total

Share of fund’s portfolio

22.3% 16.9% 11.2% 8.6% 8.3% 4.8% 4.2% 2.9% 2.4% 2.2% 1.2% 1.1% 1.1% 0.9% 0.9% 0.7% 0.7% 0.6% 0.6% 0.6% 67.2% 83.8% 92.1%

12.5% 6.1% 30.1% 3.6% 1.9% 2.4% 1.6% 1.2% 2.4% 30.8% 33.5% 6.1% 0.2% 2.0% 2.5% 3.8% 0.3% 22.6% 5.2% 2.3%

NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Future Lukoil-Garant OAO KIT Finance NPF of Electric Power Industry Promargofund NPF of Sberbank StalFond Gazfond Pension Savings Nasledie VTB Pension Fund RGS BIG 1 NPF Natsionalny Mechel-Fund Magnit Sotsium Raiffeisen Doverie Social Development Share of top 5 Share of top 10 Share of top 20

Share of total

Share of fund’s portfolio

12.9% 12.2% 7.5% 6.8% 6.4% 6.2% 5.9% 5.6% 5.6% 4.5% 4.1% 1.8% 1.5% 1.3% 1.2% 1.0% 1.0% 1.0% 0.9% 0.9% 45.7% 73.5% 88.0%

49.4% 36.2% 51.4% 40.6% 53.1% 36.8% 69.2% 39.4% 51.4% 28.8% 25.1% 30.1% 52.1% 41.1% 71.2% 46.2% 33.4% 27.8% 34.2% 52.9%

Source: Bank of Russia, our calculations

Top 20 NPF’s by holdings of regional government debt, 31.12.2014

Top 20 NPF’s by share holdings, 31.12.2014

NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Future VTB Pension Fund KIT Finance Gazfond Pension Savings NPF of Sberbank Nasledie Promargofund Natsionalny RGS Transneft Magnit Raiffeisen Regionfund BIG UMMC-Perspective Russian Standard Uralsib Khanty-Mansiysk NPF of Electric Power Industry Telekom-Soyuz Share of top 5 Share of top 10 Share of top 20

Source: Bank of Russia, our calculations

Share of total

Share of fund’s portfolio

15.7% 15.7% 10.0% 9.5% 9.4% 8.1% 7.7% 3.2% 2.3% 2.1% 1.7% 1.3% 1.1% 0.8% 0.8% 0.8% 0.8% 0.7% 0.6% 0.6% 60.4% 83.8% 92.9%

8.7% 14.4% 9.9% 9.7% 8.1% 10.8% 9.2% 15.2% 2.0% 21.1% 11.4% 5.3% 6.4% 2.0% 11.0% 15.4% 12.4% 4.7% 0.5% 21.8%

NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

RGS NPF of Electric Power Industry Lukoil-Garant OAO VTB Pension Fund StalFond Future SLP European Doverie Sberfund RESO NPF of Sberbank 1st Russian Magnit Regionfund 1 NPF Promargofund Adekata-Pension Blagodenstvie Nasledie Arel Share of top 5 Share of top 10 Share of top 20

Source: FFMS, our calculations

Share of total

Share of fund’s portfolio

19.7% 18.2% 15.4% 9.3% 5.3% 5.0% 4.9% 3.6% 2.5% 2.0% 1.5% 1.3% 1.2% 1.1% 1.0% 0.8% 0.7% 0.7% 0.7% 0.7% 67.9% 86.0% 95.6%

20.9% 18.8% 7.8% 10.2% 10.8% 3.3% 10.7% 18.3% 16.2% 9.9% 1.5% 15.8% 9.9% 8.0% 5.7% 1.2% 11.4% 18.9% 1.1% 23.8%

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Top 20 NPF’s by holdings of mortgage securities, 31.12.2014 NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

RGS Future VTB Pension Fund Sberfund RESO European Doverie 1 NPF StalFond 1st Russian Raiffeisen Regionfund KIT Finance Nasledie Adekata-Pension Blagovest Promargofund Gazfond Pension Savings Sberegatelny Siberian Capital OAO Arel Share of top 5 Share of top 10 Share of top 20

Top 20 NPF’s by cash holdings, 31.12.2014

Share of total

Share of fund’s portfolio

25.3% 16.7% 8.5% 7.5% 5.4% 5.0% 4.6% 3.2% 2.9% 2.7% 2.1% 2.1% 1.7% 1.6% 1.6% 1.4% 1.3% 1.3% 0.9% 0.7% 63.3% 81.7% 96.4%

29.2% 12.0% 10.0% 39.4% 29.5% 34.6% 29.4% 7.1% 38.9% 14.8% 15.8% 2.7% 2.9% 28.5% 34.2% 2.2% 1.8% 37.3% 39.6% 26.2%

NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Lukoil-Garant OAO Natsionalny Volga-Capital Sberfund RESO Future Stroycomplex NPF of Sberbank Nasledie Magnit Bashkortostan SLP Khanty-Mansiysk Gefest NPF of Electric Power Industry StalFond Surgutneftegaz OAO Soglasiye OAO Telekom-Soyuz Gazfond Pension Savings Strategy Share of top 5 Share of top 10 Share of top 20

Share of total

Share of fund’s portfolio

49.6% 7.9% 6.2% 5.8% 5.6% 4.6% 2.8% 1.9% 1.5% 1.5% 1.4% 1.0% 1.0% 0.9% 0.8% 0.7% 0.6% 0.6% 0.5% 0.5% 75.0% 87.3% 95.3%

8.9% 15.8% 55.4% 10.0% 1.3% 50.6% 1.0% 1.1% 4.4% 76.8% 1.1% 2.8% 13.0% 0.3% 0.6% 5.4% 3.1% 8.7% 0.2% 2.9%

Source: Bank of Russia, our calculations

Top 20 NPF’s by bank deposits, 31.12.2014

Top 11 NPF’s by holdings of international financial organisation bonds, 31.12.2014

NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

Lukoil-Garant OAO NPF of Sberbank NPF of Electric Power Industry Gazfond Pension Savings Future VTB Pension Fund KIT Finance BIG Promargofund RGS Nasledie Sotsium Raiffeisen European StalFond Khanty-Mansiysk Soglasiye OAO Regionfund Social Development Sberfund RESO Share of top 5 Share of top 10 Share of top 20

Source: Bank of Russia, our calculations

Share of total

Share of fund’s portfolio

18.9% 9.3% 7.9% 7.8% 6.6% 6.3% 6.0% 4.7% 4.4% 4.3% 2.3% 2.3% 2.1% 1.1% 1.0% 1.0% 1.0% 1.0% 0.9% 0.9% 50.5% 76.2% 89.8%

45.4% 44.5% 38.0% 44.3% 20.5% 32.6% 33.2% 62.7% 29.6% 21.3% 17.4% 65.0% 50.3% 25.5% 9.7% 36.3% 69.2% 32.0% 41.1% 19.6%

NPF

1 2 3 4 5 6 7 8 9 10 11

Future VTB Pension Fund Sberfund RESO NPF of Electric Power Industry NPF of Sberbank 1 NPF Raiffeisen Regionfund Transneft 1st Russian StalFond Share of top 5 Share of top 10 All NPF’s

Share of total

Share of fund’s portfolio

37.7% 26.4% 12.9% 6.9% 4.1% 3.4% 2.5% 2.5% 2.0% 1.2% 0.5% 88.0% 99.5% 100.0%

1.2% 1.4% 3.0% 0.3% 0.2% 1.0% 0.6% 0.8% 1.1% 0.7% 0.1%

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Top 20 NPF’s by miscellaneous assets, 31.12.2014 NPF

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20

SLP Adekata-Pension Blagovest Future Lukoil-Garant OAO Nasledie Promargofund Sberegatelny Mechel-Fund NPF of Sberbank NPF of Electric Power Industry KIT Finance Siberian Capital OAO RGS StalFond Natsionalny Gazfond Pension Savings VTB Pension Fund Sberfund RESO New Age Share of top 5 Share of top 10 Share of top 20

Share of total

Share of fund’s portfolio

51.9% 4.5% 3.8% 3.7% 3.2% 2.7% 2.3% 2.2% 2.1% 2.1% 2.1% 1.8% 1.8% 1.6% 1.5% 1.3% 1.3% 1.2% 0.9% 0.7% 67.1% 78.5% 92.7%

78.1% 49.9% 51.4% 1.7% 1.1% 2.9% 2.2% 41.1% 14.7% 1.5% 1.5% 1.5% 51.1% 1.2% 2.1% 5.2% 1.0% 0.9% 3.0% 60.1%

Additional clarification and comments For reading convenience the names of corporate entities (non-state pension funds, asset management companies and others) presented in this report, as well as the names of groups, may have been changed or abbreviated in such a way that they remain recognizable. Data for returns on invested pension savings at NPF’s was obtained directly from the funds’ representatives and/ or from public sources that the author of this report deems reliable, such as the funds’ own websites, websites dedicated to the activities of the PFR and non-state pension funds, and media reports. In cases where the information in various sources differed, this report uses the source that the author deems most reliable. The absence of information on returns at certain NPF’s prior to 2009 and the absence of certain funds altogether indicates either that a fund did not handle mandatory pension accounts during the period under discussion or that it failed to respond to the author’s request for information. To calculate the return on invested pension savings at asset management companies, including the state corporation Vnesheconombank (VEB), this analysis drew on performance measures published by the Pension Fund of the Russian Federation, including the investment portfolio growth coefficient, which was used to calculate the actual returns paid into individual pension accounts.

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P E N S I O N SAV I N G S I N R U S S I A . 2014

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