Individual Pension Capital: Financial Law Aspect of the Comparative Study

Abstract

The concept of individual pension capital that has doth supporters and opponents is being subjected to heated debate in the Russian Federation. A similar mechanism has long been successfully applied in the legislation of foreign states, thereby reducing the considerable burden on the State, especially in the United Kingdom and New Zealand. The introduction of individual pension capital abroad implies legislative consolidation of preferences for depositors (potential pensioners) and employers. The study of foreign experience reveals advantages of best practices application in the Russian legal system. The data given are particularly relevant in the context of the Russian Federation demographic and economic transformations that demonstrate the need to improve the pension system in order to ensure the subsequent provision of elderly population with the means of living. The pension systems discussed in the article have both similar and distinctive characteristics. The latter include: - the amount of the replacement rate that shows the extent to which pension systems are aimed at maintaining an individual standard of living of an employee transferring to the pensioner category; -determination of the role of the public or private sector in pension benefits. The examples of foreign practice reviewed in the article demonstrate that IPC systems are actively implemented and used in the public pension system and are in demand among among employable citizens.