This pension will not last forever: why do heirs lose their relatives' savings
Retirement savings are money that Russians have been saving for old age for decades. But here's the paradox: if a person dies after the start of indefinite payments, the savings remain in the system — they no longer get to their relatives. Lawmakers propose to change this (the text of the initiative is at the disposal of Izvestia). Serious disputes broke out: how fair is the current procedure, does the revision threaten the stability of the entire pension system? The State Duma is proposing to review the principle of compensation for missing the six—month period in which pension heirs are required to submit an application, Izvestia has studied the problem.
If it's not transmitted, it doesn't count?
Currently, the funded part of the pension passes to the heirs only if the person died before the pension was awarded or received an urgent (rather than lifelong) payment, and if the death occurred after the appointment of an indefinite payment, the funds remain in the system. This causes citizens to feel a loss of control over their savings and reduces interest in voluntary contributions, the State Duma says.
The proposed initiative will make the existing order of things more understandable for citizens, the lower house of parliament is confident.
—Expanding the possibilities of inheritance — for example, granting the right to transfer the balance of savings in case of death at any stage — makes the system more logical for citizens and may increase interest in voluntary contributions," Sergei, chairman of the State Duma Committee on Property, Land and Property Relations, member of the National Financial Council of the Bank of Russia, said in a conversation with Izvestia. Gavrilov.
Meanwhile, the Bank of Russia stressed that the current procedure is related to the specifics of lifetime payments, when the funds of the deceased remain at the disposal of funds for payments to other pensioners before the end of the average expected payment period. "The revision of current approaches to payments to legal successors will contradict the basic principles of making lifetime payments and will negatively affect the financial stability of insurers under OPS," the regulator's press service warns.
Yulia Oreshchenkova, Deputy Director of the Research Center for the Development of the State Pension System and Actuarial and Statistical Analysis, explains that pension savings are state property and are inherited only after an urgent payment is made (with the exception of maternity (family) capital), which not everyone receives. She also notes that the classical theory of compulsory pension accumulation insurance involves the redistribution of unpaid funds within the system, therefore, expanding the possibilities of inheriting pension savings requires a review of retirement age, property rights and an actuarial assessment of the financial consequences for NPFs.
Nevertheless, there is a tendency to expand inheritance in the world, and a long-term savings program has been in effect in Russia since 2024, under which inheritance takes place in full, which is an alternative approach.
MSU Professor Svetlana Khmelevskaya agrees with the need to expand the conditions of inheritance: "The benefits for legal successors are obvious." She warns that the main problem is not the expansion of the list of assets for investment, but the limited availability of reliable and profitable instruments in the Russian financial market and high volatility. According to her, more than 250 companies are traded on the Moscow Stock Exchange, but only 63 of them meet the requirements for investments of non-state pension funds (NPFs). Information about a number of issuers is only partially disclosed, which also makes it difficult to invest, and debt financial instruments are more preferable for NPFs and most of them do not even reach the established limit on shares, the MSU expert notes.
Deputy Chairman of the Federation of Independent Trade Unions of Russia (FNPR) David Krishtal believes that transparent and acceptable conditions for joining the system are also needed, secured by personal agreements with a specific citizen and a non-governmental pension fund or the organization entrusted with this function (for example, the Social Fund of Russia, SFR). Therefore, the FNPR considers the revision of the rules for the functioning of the pension savings system to be quite acceptable, provided that it is aimed at improving equity, social and material well-being of citizens.
Galina Morozova, Chairman of the Board of Directors of NPF Future, is confident that the principles of inheritance applied are fair and do not require reworking.
— The current procedure for inheriting pension savings excludes from inheritance only funds that have already been used to pay a lifetime funded pension. In all other cases, the remaining funds are subject to inheritance," she said.
Profitability versus reliability: what prevents the growth of savings
The current investment policy of pension funds is conservative: the bulk of investments are in government bonds with low yields, which leads to a real decrease in savings adjusted for inflation, the State Duma is convinced. Allowing the use of more profitable but controlled instruments — corporate bonds, shares of Russian companies, infrastructure projects — can increase the profitability and attractiveness of the system. At the same time, according to the legislator, it is important to ensure a system of restrictions: for example, to set a threshold for investments in risky assets, oblige funds to use loss insurance mechanisms and regularly publish performance results. "The freedom of funds does not turn into a threat to citizens, but gives a chance for a real increase in their future pensions," says MP Gavrilov.
However, the Bank of Russia notes that funds already have ample opportunities for diversification: up to 100% of pension funds can be invested in corporate bonds if they have the required rating level, and up to 40% in stocks. As of April 2025, the share of corporate bonds in the pension assets of NPFs was approaching 40%, and the share of shares was 7%. In 2024, the opportunities for NPFs to participate in IPOs were expanded, and funds also gained access to standardized PFIs. At the same time, the regulator plans to ease the requirements for portfolios and tighten stress testing to maintain financial stability.
"Currently, further easing of the requirements for the composition and structure of NPFs' portfolios is being prepared, while tightening the requirements for stress testing of their activities," the Central Bank told Izvestia. — This will provide NPFs with new investment opportunities while ensuring their financial stability.
Yulia Oreshchenkova believes that currently, due to high inflation and the difficult macroeconomic situation, expanding opportunities for investing pension savings can be a very risky business. An analysis of the indicators of accumulated profitability for the period from 2017 to 2024, according to the Central Bank, shows that it amounted to 63.6% for pension savings in NPFs, and 64% for pension reserves. The expert also points out that the accumulated return on pension savings was only 44.7%. And this, in her opinion, seems to be a much more significant problem.
— In short, the accumulated returns on non—state pension provision and compulsory funded insurance are almost equal, despite the fact that the NGO investment portfolio is more expanded, - the expert notes.
Svetlana Khmelevskaya emphasizes that the established limits on NPFs investing in stocks are quite reasonable, especially in the current conditions of the Russian stock market and high volatility. In this regard, she calls for a cautious expansion of financial instruments, but "extremely restrained and reasonable."
Six months for inheritance: is it fair?
Now the heirs must apply for the pension savings of the deceased within six months. Missing the deadline means litigation, which takes time, money, and legal literacy. MP Sergey Gavrilov suggests changing this approach.
"In practice, the six—month limit may be excessive for those who live abroad, or were not aware of the right to savings, or face delays in processing other inheritance documents," he believes.
Therefore, Gavrilov believes, the solution may be to keep six months as the basic rule, but to introduce automatic prolongation for another six months if a notification of intention to apply for payment is submitted or if there are objective grounds (for example, illness or force majeure).
Associate Professor of the Department of Labor Law and Social Security Law at the O.E. University. Kutafina Regina Dolotina emphasizes that the term corresponds to the inheritance legislation, but the absence of a list of valid reasons leads to the need for judicial restoration of the term. She recalls that to date, there are no provisions in the legislation that allow the SFR to extend or resume the missed deadline at the request of legal successors out of court.
Marina Butylina, Associate Professor of Economics and Public and Municipal Administration at Moscow University of Finance and Law, notes that the existing procedure leads to an increase in the cost of the inheritance process, so she suggests that the inheritance registration be deformed as much as possible.
Anna Alexandrova, Associate Professor of the Department of Public Law at Penza State University, agrees with her. She draws attention to the frequent legal illiteracy of heirs and the lack of a fund's obligation to notify about savings, which often leads to missed deadlines. In this regard, the expert suggests extending the period to 12 months and obliging the funds to inform relatives.
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