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Competition Among Non-State Pension Funds in the Russian Pension Market

Author

Listed:
  • Gulnara F. Fatkhlislamova

    (Russian Academy of National Economy and Public Administration, Moscow 119571, Russia)

Abstract

At the present time, non-state pension funds (NPFs) have the opportunity to form financial resources by attracting funds from both the obligatory pension insurance system (OPI), which is the state component of the pension system, and the non-state pension provision (NPP), which is a voluntary component of the pension system. Functioning in these two areas, NPFs have quite significant financial resources — according to 2017 estimates, almost 5% of GDP. One of the factors affecting the efficiency of managing these funds is the state of the competitive environment of NPFs’ activities. The purpose of this article is the estimation and comparative analysis of the competition level among NPFs in two segments: the OPI and the NPP. The calculated Herfindahl–Hirschman index made it possible to estimate the dynamics of changes in the type of market structure in the OPI and NPP segments. Further in the work, it is shown that the quantitative factor of the market ambiguously influences the level of concentration in both segments. Concentration indicators showed an increase in concentration among the largest NPFs in the OPI segment. This trend is especially clearly seen when the Bank of Russia starts to exercise its functions as a financial market regulator. The use of the Linda index allowed the delineation of the market power boundaries in the segments of OPI and NPP, defining the segment of NPP as a “soft” oligopoly, and the segment of OPI as monopolistic competition. The study revealed that the implementation of pension reforms led to increased market concentration in the OPI segment and weakening of concentration in the NPP segment.

Suggested Citation

  • Gulnara F. Fatkhlislamova, 2019. "Competition Among Non-State Pension Funds in the Russian Pension Market," Finansovyj žhurnal — Financial Journal, Financial Research Institute, Moscow 125375, Russia, issue 4, pages 9-23, August.
    • Handle: RePEc:fru:finjrn:190401:p:9-23
    DOI: 10.31107/2075-1990-2019-4-9-23
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    More about this item

    Keywords

    market concentration; segment of obligatory; pension insurance; segment of non-state pension provision; concentration indicators; market “core”; market “outskirts”;
    All these keywords.

    JEL classification:

    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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