The Treasury will for the first time begin to manage the reserves budget Fund :: Economy :: RBC

The Finance Ministry has proposed to give the management of the reserves of the social insurance Fund of the Federal Treasury. The new scheme will allow to double the income, according to the Department. Management of means PFR can also go to the Treasury, said the expert

Photo: Ilya Pitalev / RIA Novosti

The Finance Ministry proposes to transfer authority for management of the free funds of the social insurance Fund of the Federal Treasury. The draft amendments to the Budget code published on the portal disclosure regulations.

FSS earns, placing funds of the reserve for insurance against accidents at work and occupational diseases in Bank deposits and conducting REPO transactions. According to the latest information of FSS at the end of June, the minimum interest rate made up 6.92% per annum.

But the Treasury could earn more, follows from the project of the Ministry of Finance. The Fund is “not typical” self-service placements of reserves, and the amount of revenue is limited to a minimum interest rates, said RBC representative of the Ministry of Finance. It “does not allow to fully administer the funds of the insurance reserve in the volatile financial market conditions and subject to specified limitations in terms of the minimum interest rate,” he added.

The current scheme is “in fact leads to a shortfall in Fund income from placing funds of the insurance reserve,” says the explanatory note to the bill.

According to the forecast of the Ministry of Finance, the average annual volume of provision of FSS will be reduced by almost 11% in the next three years, from 162.6 mln RUB bln in 2019 to 144.8 million bn in 2021 (these figures are given in the feasibility study of the draft amendments). The total income of the Fund from investment will amount to RUB 15 billion in the next three years, according to the FSS.

Management by the Treasury, as is predicted by the Finance Ministry, will allow to almost double the amount of revenue. Income will be about 29 billion rubles. for three years, according to the Ministry.

Currently, 100% of the proceeds from the placement of the provision of FSS shall be credited to the Fund. After the transfer of control to the Treasury Ministry of Finance proposes to change the standard in the calculation of the 85% — to the budget of social insurance Fund, 15% in Federal coffers. In a similar way distributed the revenues of private pension funds from placing of means of pension reserves and investment of pension savings (85% go to replenish reserves and the rest for remuneration to management companies and specialized Depository). According to the Finance Ministry, the FSS and the beneficial changes will increase the income of the Fund to 24.65 billion rubles in the next three years. The budget of such a mechanism will receive 4,35 billion RUB in the coming three years.

It is expected that the amendments will enter into force on 1 January. The press service of the FSS did not comment on RBC proposal of the Ministry of Finance.

Photo: Stanislav Tikhomirov / “Kommersant”

Two more Fund

The placement also involved the Pension Fund and the mandatory health insurance Fund (HIF). Treasury their means does not control, and only provides cash services, said the representative of the Ministry of Finance.

Currently in the reserve of the Pension Fund accumulated 122 billion rubles, told RBC press service of the FIU. Income from placing funds of the reserve in 2017 amounted to 4.94 billion rubles, follows from the reporting FIU (*.pdf), Deposit rates were in the range of from 7.5 to 10.15%. HIF did not answer the questions of RBC.

As told RBC member of the expert Council under the government of Alexander Bragin, it is possible that in the future authority to deploy available funds PFR and FOMS also will go to the Treasury. “It is a conditionally non-budgetary funds, which in fact are quasi-fiscal. If they concentrate services in the hands of the Treasury, the state’s position, it will be more transparent,” the expert explained.

In a press-service of the HIF was unable to immediately comment on the RBC the likelihood of transmission to the Treasury management of surplus funds. The Pension Fund declined to comment.

Bragin sees no risk of centralization of functions at the Treasury. “He’s more reliable and profitable earning opportunities, and the yield is higher due to a larger volume of funds. To transfer the management of the Treasury is to shift from one pocket to another. Definitely will not be worse”, — the expert believes.

The Treasury, as he wrote RBC, will give the powers to accounting and wage employees of all ministries subordinate to the government. It will save the Department from non-core activities and reduce costs. As explained Deputy head of Treasury Stanislav Prokofiev, in the ministries of the order of 20 thousand accountants. The Treasury, in his words, accounting will be engaged in only a thousand professionals.

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