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Fund Misses Notification Deadline
Pension Fund head Mikhail Zurabov
Gearing up for the transition to an
investment-based pension system, the Pension Fund promised to send account
status notifications to all future pensioners by Aug. 1. Not only did it
miss the deadline, but it will not be ready even by Oct. 1.
As a result, management companies and
government officials have said the fund should give people at least an
extra month to pick a manager for their pensions.
Under a June government decree, the
Pension Fund was supposed to send out the letters to all
"investors" by Aug. 1, but according to a press release from the
fund last week, only 1.7 million of the estimated 40 million letters have
been delivered so far. The fund has printed 5.4 million notices and given
4.3 million of them to the post office.
The fund said its printing center,
which was set up to send the letters, will work around the clock to put
out 600,000 notices per day. Even so, by Oct. 1, the center would only
have 33.6 million letters ready.
In addition to information about the
balance of the pension account as of Jan. 1, 2003, the letters contain a
form for selecting a pension management company. According to the letters,
those who wish to use a private management company rather than the
government's default manager, Vneshekonombank, must reply to the Pension
Fund by Oct. 15.
"If the Pension Fund really cannot
send out all the notices by late September, we must extend the application
deadline, otherwise future pensioners' right will be seriously
violated," First Deputy Economic Development and Trade Minister
Mikhail Dmitriyev said.
Yevgeny Gontmakher, head of the
government's administration department, agreed that the deadline for
applications should be moved to Nov. 15, but he noted that it is up to the
fund, not to the government, to do so.
Pushing back the deadline should not
delay the transfer of funds to management companies, which has been set
for Jan. 1, 2004, Gontmakher said.
"It is strange that the Pension
Fund has not informed the public about its difficulties," said Alexei
Shkrapkin, director general of management company Kapital. "Until now
[Pension Fund head] Mikhail Zurabov had been promising to meet the set
"The scope and the timeline of
this work were known well in advance," said Polina Kryuchkova, an
expert with the Confederation of Consumer Societies. "Did the Pension
Fund not know its own printing center's capabilities until now?"
Management company representatives
believe the application deadline should be extended.
"At least one month from the time
the last letter is received should be given for selecting a management
company," said Yelena Kasyanova, head of the fiduciary transactions
department at Bank of Moscow. "Otherwise, the ongoing tender for
management companies makes very little sense."
Even so, the proposed extension may not
"Processing applications is technologically a much more difficult process than mailing notices, so the fund will probably run into the same to work overtime to meet the deadline," Shkrapkin said.