Private Pension Funds in the Context of Pension Reform
In 2015 has started discussing directions, goals and objectives of the reform of the Belarusian pension system. The need for pension reform is actualized by the rapid aging of the Belarusian society. One of the elements of Western pension systems are private pension funds that offer Fund members a higher level of pension provision compared. The purpose of the study is to describe the structure and activities of the private pension Fund (PPF). Material and methods. The study used statistical and analytical materials published on thematic Internet sites and in printed publications. In the research process, private pension funds abstract-and ogical, statistical and comparative methods of economic analysis are used. Findings and their discussion. The main activity of PPF is connected with shares market where the Fund is both the emitent and the financial investor as well as the financial broker. The PPF income is formed as a result of investing its own capital and pension reserves into different types of financial assets. The investment PPF income is divided into two parts: main income and residue income. The main income is aimed at indexing pension savings in accordance with inflation rate. The residue income is distributed among share holders. The main problem of PPFs is its functioning according to the principle of a financial pyramid. The Fund’s assets are represented mainly by securities. Current pensions should be funded by current contributions of employees of young ages. However, in an ageing society the influx of new deposits lags behind the magnitude of the cash requirements for pension payments. And if the Funds will start synchronously selling their securities in order to replenish liquidity, the collapse of the stock market with the consequent discrediting of the private pension system is inevitable.