Gabunia says that by setting the limit, the CB expects to boost real sector project investment. The regulator has already notified non-state pension funds, giving them time to prepare, assured Gabunia. The only thing NPFs have requested so far is for the regulator to acknowledge the fact that market volatility slows the process of selling off bank assets. Therefore, said Gabunia, “we may move back the deadline, possibly lower the bar to 60% as requested by NPFs”.

The CB does not set apart overall banking investment for pension savings. Only bank deposits and accounts are separated – with 40% of NPF savings, or over RUB 440bn invested there as of January 2014 (the most recent CB data). The proportion of savings invested in bank bonds and shares has not been disclosed by the CB. Banks will handle the cut in pension funding quite well, says Gabunia: prior to setting the 40% limit, the CB made impact assessments. Banks’ dependency on pension money has rocketed since foreign markets became inaccessible. In the midst of last December’s liquidity crisis, even Sberbank and Gazprom set 25%+ p.a. rates on 2–3-month loans, says Deputy CEO at Pallada Asset Management Alexander Baranov.

Bank deposits were the most profitable instrument for NPFs in 2014, and were used to minimize stock market losses. “Deposits offered 2–3 b.p. more yield than corporate bonds, plus it was guaranteed and volatility-free income unlike securities”, says CEO at Evropeysky NPF Evgeniy Yakushev.

Now NPFs have less options to resort to deposits if the market collapses, says Baranov. However, liquidity is less of a problem: in 2015, NPFs have become able to retain clients for five years – no more need to keep large amounts in deposits.

In 2015, NPFs will receive over RUB 500bn in new savings. Now that funds are already close to the limit, bank accounts will receive some RUB 200bn, unlike the past, says Baranov. He is certain, however, that the new 40% bar is ‘not a threat’ for most NPFs as well as banks.

Evropeysky NPF has below 40% bank assets, says a fund rep. The banking sector investment limit may be circumvented, says Head of Pensions. Deposits will be replaced by other instruments, like mortgage certificates, with any underlying assets, he muses. “Crossover schemes will become more popular, with divisions swapping instruments”, he says.

He is certain that the CB will manage to diversify risks. “When owners of the group are financed by their own fund, they are tempted to pass on potential problems to the state: “help us, buy our assets, bail us out”. The crossover scheme splits risks and liabilities evenly – you are accountable to the partner as he is to you”.

Financial markets megaregulator, Project Group №1