What is non-government pension fund?

Non-government pension fund (NPF) – is Nonprofit Organization that works according to the Law of Ukraine "About Non-state Pension Provision" (hereinafter "Law"), to accumulate pension fees in favor of the participants of non-government pension fund, investing pension fees to obtain investment income, and to pay-out pensions to the participants.

For optimum activity of Non- government pension fund according to the Law there is a specific infrastructure that includes the following companies:

Company	Functions
NPF administrator	conclusion and conducting pension contracts; opening and management of fond participants accounts; accounting of pension fees; charging of investment income to pension accounts of the participants; calculating and payment of pension fees; forming and distribution of fund accountancy to state institutions, fund participants, counteragents.
Asset Management Company	investing of fund assets according to the legislation and investment manifest; accounting and informing about the composition and earnings yield of fund assets.
Custodian	spot service of all actions of current accounts of pension funds; deposit service of actions with securities; control of AMC for law and investment NPF manifest observance confirming of AMC information on structure and yield of fund assets.

State supervision and control in scope of non-state pension provision is made:

• for non- government pension fund activity –
  State Committee of Ukrainian financial services market regulation;



• for non-government pension fund administrator –
  State Committee of Ukrainian financial services market regulation;



• for activity of managers of non- government pension funds assets – State Committee of securities and fund market;



• for activity of custodian of non- government pension funds assets –
  National Bank of Ukraine  and State Committee of securities and fund market.

Pension fees – are cash assets paid by depositors of non- government pension fund in favour of the participant of non- government pension fund by one's own free will at the rate and order accepted by the parties and indicated in pension contract, - bilateral treaty between parties according to which non-state pension provision of the participant is made.

The rate of pension fees, indicated in the contract can be changed according to the conditions of chosen pension scheme. Maximum rate of pension fee under the pension scheme is not limited. Each investor has the right to make one or more pension contracts.

Joint yield consists of:

• profit from operations with non-government pension fund assets;



• passive income from non-government pension fund assets (interest that are charged and paid from cash deposit banking accounts, yield from non-government pension fund assets in securities).

Profit distribution between the fund participants is made pro rata to amounts on their personal pension accounts to the date of division. Accounting of non-government pension fund participants` portions of profit is made by the administrator at personal pension accounts.

Setting of minimum guaranteed profit rate under any pension scheme is prohibited. Accounting of profit and its distribution between the participants of non-government pension fund is not made by the administrator rarely than once a month.

The structure of pension assets.

Finacial	Maximum unit in the total value of fund assets, %
Bank deposit balances and saving certificates	40, but not less than 10 in one bank
Bank metals	10
Securities, reimbursement of which is guaranteed by the Cabinet of Ministers of Ukraine	50
Securities reimbursement of which is guaranteed by the Council of Ministers of Crimea Autonomous Republic and bonds of local loans	20
Bonds of Ukrainian issuers	40
Shares of Ukrainian issuers	40
Securities of foreign issuers	20
Hypothecary securities	40
Real estates	10

Types of pension fees.

The participants of non-government pension fund can have such types of pension payments:

• pension for a definite period;



• lump sum pension.

Pension for a definite period and lump sum pension payment are paid to the participant of non-government pension fund by the administrator on behalf of this non-government pension fund.

Pension payments shall be performed to the participant or its heirs in monetary form at the expense of pension assets, which were accumulated in the non-government pension fund and are accounted on the individual pension account of a participant according to the existing legislation of Ukraine.

According to the legislation of Ukraine the participant of non-government pension fund can also conclude an insurance agreement with insurance company for life-time pension to have perpetual annuity.

Grounds for obtaining of pension payment:

• achieving of pension age, indicated in the application of pension payment. Pension age that is determined by the participant of non-government pension fund can be more or less than the pension age that gives the right for pension under general pension state insurance for not more than ten years;



• invalidity of the participant of non-government pension fund. In case of obtaining by the participant of the right for invalid pensions by the system of general pension state insurance, the participant has the right to determine his pension age after invalidity occurrence without restrictions and has to provide appropriate application to the administrator;



• medical certificate of critical condition of health (oncological disease, stroke, etc.) of non-government pension fund participant;



• departure of the participant of non-government pension fund from Ukraine to the permanent residence. In case of departure the participant has the right to obtain lump pension payment without age limitations and gives the appropriate application to the administrator.


• the death of the participant of non-government pension fund. In case of death of the participant, pension payment is received by his heirs.

Amount of additional pension.

By making pension fees to non-government pension fund of slight amount of salary during continuous period of time one can provide himself with additional income that will be paid for the costs of pension payments of non-government pension fund.

In formation of pension accumulation, great attention is paid to accumulative period and not to the amount of fees, because gained investment income is constantly reinvested even at the period of making pension payment.