Putin rules to use wealth fund money to cover pension deficit

MOSCOW, Jun 13 (PRIME) -- Russian President Vladimir Putin has ordered the government to decide how many resources from the National Wealth Fund, designed to secure the pension system, could be used to cover the deficit of the pension fund, as cited by RIA Novosti on Thursday.

“Depending on the parameters of a formula to calculate pensions, we need to set limits within which we can use the resources of the National Wealth Fund to cover the deficit of the pension fund,” Putin, who is serving his third term in the Kremlin, said in his budget address to the government.

Putin also said that resources of the National Wealth Fund and pension savings have to be used to finance infrastructure projects, whose implementation could help spur growth in a stagnating economy, among other measures.

Russia’s economy, which has been slowing down since 2012, grew only 1.8% in the first four months of the year and still shows no signs of breakthrough, Deputy Economic Minister Andrei Klepach complained recently.

Putin said that a reimbursement of the funds into the National Wealth Fund must be guaranteed and a clear mechanism of project selection and money transfer has to be worked out. He also called for the creation of new instruments to attract private investments into infrastructure and use the mechanisms of a public and private partnership.

Putin has also suggested that the government has to consider alternative ways to administer the resources of the Reserve Fund, meant to protect the budget against a fall in oil prices, and the National Wealth Fund instead of the Russian Finance Agency, whose creation has not been fully approved by the parliament.

“There was a proposal to create the Russian Finance Agency to manage the resources from the Reserve and the National Wealth funds. But an attempt to implement this idea has uncovered a slew of unsolved problems. It is necessary to look at alternative mechanisms to increase the efficiency of these resources’ management,” Putin said.

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