The kremlin Is Preparing a New Pension Heist

The kremlin plans to forcibly transfer russians’ pension savings into a new state-run scheme – the long-term savings program (LTSP). At stake are about 3 trillion rubles in the accounts of 37 million russians who still have not chosen a private pension fund to manage their funds.

The rationale is pragmatic: the money will go to non-state pension funds (NPFs) for investment in infrastructure and “state projects”, while the economy will receive “long-term funds”. The main beneficiary could be the “blagosostoyanie” NPF, among the shareholders of which are “russian railways”, gazprombank, and VEB.rf – that is, entities under direct state control.

Please, be reminded that in 2014 – immediately after the occupation of Crimea and the imposition of sanctions – the government “froze” the funded portion of pensions. At that time, 6% of the 22% of pension contributions that were supposed to go into citizens’ personal accounts were simply redirected to payments for current pensioners, plugging a hole in the pension fund. The freeze was announced as temporary. But it has lasted until now – for over ten years.

The LTSP was launched in 2024 as a supposedly voluntary alternative to attract public funds to the stock market, which had been devastated by the departure of foreign investors following the full-scale invasion of Ukraine. The plan failed: in two years of operation, the program raised only 717 billion rubles from 10 million participants. putin personally urged the government to “more actively encourage” enrollment in the LTSP, but voluntary enrollment did not yield the desired result. Now, as the saying goes, there is an option on the desk that is not even close to voluntariness.

The specific mechanism for the transfer has not been determined yet, but the logic behind the initiative speaks for itself: when the state needs “long-term funds” to finance projects amid sanctions and budgetary pressure from the war, it traditionally finds them in the pockets of future pensioners.