Recently, there has been an increasing amount of advertising on the Internet, in the press, and on television regarding investments in non-state pension funds (NSPF). The online space is saturated with messages about the potential returns and dividends that can be gained through such investments. NSPFs strive to offer prospective clients the most favorable conditions with higher interest rates and fewer restrictions.
Many people find themselves overwhelmed by the sheer volume of offers available. Individuals often feel lost and unsure of which fund to choose. To minimize the likelihood of making a mistake, it is essential to thoroughly explore the offerings and understand why some funds provide higher returns than others.
Sergey Tereshkin, the founder of Oil Resource Group, aims to help clarify the options available. The entrepreneur has carefully analyzed the instrument and can share valuable insights derived from his research. More information about him can be found on his website: oilresurs.ru.
Features of NSPFs
Non-state pension funds emerged in Russia around ten years ago. Prior to this, pension contributions were solely deposited in state organizations.
NSPFs serve as an alternative source of investment that can offer passive income. Potential investors can receive dividends along with their pension based on the amount contributed.
Non-state pension funds accumulate investors' funds in specific accounts and subsequently invest them in promising avenues expected to yield returns. As a result, the organization earns a percentage from all successful transactions. The compensation structure is predetermined by the board of directors.
Investors are entitled to a share of the profits generated by the organization.
Assessing the Reliability of a Non-State Fund
Not all non-state pension funds can be categorized as reliable. To minimize risk, it is advisable to independently examine all available information.
Sergey Tereshkin recommends drawing conclusions based on specific criteria:
- State oversight. The organization's activities should be monitored by the state. If questionable operations are detected, the institution loses its license and, consequently, its ability to operate in the market.
- Presence of licensing documentation. The fund must possess the appropriate license that allows it to conduct financial transactions in the market. This document should be presented to potential investors upon request. The absence of such a license may indicate fraudulent activities by the financial institution and illegal operations.
- Charter capital. Upon the organization’s registration, founders contribute a specific amount to the charter fund. The limit is defined by documentation and legislative acts.
- Employees. The personnel of a non-state pension fund should be officially registered. It is crucial that the employees have at least three years of experience in similar positions.
- Own reserves. The organization should maintain a certain insurance reserve in its accounts, which acts as a guarantee for payouts to investors.
An organization's reliability can be assessed by the extent of rights and obligations, as well as the level of access to investors’ funds. NSPFs cannot keep investors' money in their accounts. Independent certified custodians are designated for this purpose. This way, the state protects investors from the loss of funds.
When selecting a non-state pension fund, it is essential to verify compliance with all the aforementioned requirements. Clients have the right to ask for documentation to confirm this, and such papers can be reviewed at the organization's office.
Returns on Pension Funds
As previously mentioned, non-state pension funds offer varying percentages on the invested amounts, even under similar operational conditions among organizations.
The differences in returns are attributed to the operational characteristics of these organizations. Both investors and the financial institution earn income from the assets in which the funds are invested. It is crucial to choose profitable directions that not only preserve capital but also increase it.
However, any astute investor understands that investing money always carries the risk of total or partial loss. There are no guarantees that funds will be returned in full, let alone with profit.
Non-state pension funds utilize various tools to create their portfolios. The yield of investments heavily depends on the right choice of direction.
Useful Tips
To choose a pension fund that will wisely manage the investment, several factors should be considered:
- It is important to understand that the choice of investment direction affects both returns and risks. Before investing, clarifying which tools the fund utilizes is essential. If high-risk operations are involved, it is advisable to refrain from collaboration.
- The financial organization should diversify risks optimally. Otherwise, the investor may risk losing their funds. Various instruments should be employed, some of which can offset losses from others. This typically includes government securities, which have low profitability but are government-backed. Meanwhile, commercial entities can offer good returns but come with a higher risk of loss.
- When choosing an organization, preference should be given to those with average return levels. Pursuing exceptionally high dividends may not be prudent, as minimal returns may not even cover inflationary fluctuations.
When selecting a non-state pension fund, all aspects should be carefully considered before allocating funds. It is crucial to examine all available information and request any missing documents. This will help safeguard your savings and prevent potential losses.
