PSF Structure
To ensure transparency of Pension Savings Fund (PSF) and prevention of a loss of accumulated pension savings, the fund has been separated from business entities operating on the financial market and is now an independent legal entity not engaged in any business activity.
The following companies provide professional services to pension funds:
| Operator of the financial market services | Function | |||
| Professional administrator |
Makes pension contracts, services individual pension accounts, register s pension contributions, processes pension payments, forwards pension payments to bank accounts |
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| Assetmanagementcompany(AMC) | Analyzes the market of financial instruments, places assets in accordance with the investment declaration of the pension fund, ensures profitability of the fund | |||
| Depositary bank | Enters pension contributions in individual accounts, executes instructions of the administrator and AMC regarding withdrawals from the fund’s accounts, keeps the record of securities on the DEPO account. |
The structure of the non-governmental voluntary pension system is based on the diversification of functions. The functional structure of the fund is divided into several levels.
Pension funds as such only accumulate contributions and select financial institutions that support their operation.
A pension fund is administered by a special company, a so called professional administrator whose main function is to keep track of contributors and participants and forward contributions to individual pension accounts.
The contributions accumulated in the fund are managed by the asset management company which places the funds assets so as to maximize their value. Its investment policy rests on three guiding principles: reasonably conservative approach to investment, risk free placement of assets and diversification.
Commercial banks are also legitimate operators of the market of non-governmental pensions. The depositary bank creates and services the current accounts of the pension fund and DEPO securities account. The bank keeps all documents confirming the fund’s right to certain types of investment.
The law permits the combination of the administrative and asset management functions, provided that increased requirements to the charter fund are met and appropriate licenses obtained.
The advantages of such structure of the voluntary pension system are obvious:
·The Pension Fund’s operation is based on the transparency principle; its assets are completely separated from the assets of business entities, which guarantees their safety and integrity even if the latter run into financial troubles.
·The indicated subjects have the right to service an unlimited number of pension finds and the servicing overheads in this case do not fall onto a single pension fund but are split among several PSFs.
For further information please call (044) 230-48-12
E-mail: info@pension-invest.com