Russian Pension Funds to Double Managed Assets, Boost Returns with Focus on OFZ Bonds by 2025

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Combined pension assets (NPF + SFR) grew by 17.2% in 2025, reaching 9.5 trillion rubles. This outpaced nominal GDP growth for the first time in five years, with the pension-to-GDP ratio jumping from 4.0% to 4.4%. The key drivers were record investment returns and a surge in contributions to the Long-Term Savings Program (LTS).

LTS Eats into OPS

The main structural shift was the strong growth of LTS. The number of participants increased more than threefold (+6.2 million) to 9 million. 7.1 million contracts were signed (+144% compared to 2024). Savings contributions totaled 303.5 billion rubles.

On the flip side, mandatory pension insurance (OPS) shrank rapidly. The number of citizens forming accumulations in NPFs fell by 789,500 to 35.2 million. The main reason: in 2025, for the first time, a mechanism was introduced to transfer pension savings to LTS. According to 2024 statements, 430,400 people did this, automatically losing their status as insured under OPS. Another 266,000 dropped out due to death.

Age "Skew"

More than 40% of LTS participants are already over 60 years old. Among men, the share of those over 50 is 69%, among women - 76%. The share of clients under 29 is less than 2%. This limits the investment horizon for NPFs: payments under contracts with pensioners and pre-retirees will be required in the coming years, reducing opportunities to invest in long-term illiquid assets. Women make up two-thirds of the LTS base, but their average account is lower (63,600 rubles vs. 80,600 rubles for men).

Investment Shift from Deposits to OFZ

Anticipating a looser monetary policy, NPFs radically rebalanced their portfolios:

• NPF pension funds: OFZ share soared 7 percentage points to 49.2%, corporate bond share plummeted 4.9 points to 31.7%. Equity share rose slightly to 8%.
• NPF pension reserves: OFZ share increased 8.4 points to 33.4%.

Funds massively exited deposits and money market instruments, whose yields fell in line with the rate. In pension funds, the deposit share shrank from 4.1% to 1%, in pension reserves - from 5.8% to 2.1%. The combined NPF and SFR share of the OFZ market reached 12.9% (NPF alone - 9.3%). Funds bought fixed-coupon OFZs (OFZ-PD), locking in high rates, and sold floating-rate (OFZ-PK) and inflation-linked bonds.

Yield Surge

The weighted average return on NPF pension fund investments jumped 4.9 percentage points to 14% annually (net - 10.8%). For pension reserves, the figure soared 8 points to 16.2% (net - 13.3%). These are the highest values ever recorded, more than doubling or tripling inflation of 5.6%.

Moscow Exchange indices confirm the trend: the conservative RUPCI index gained +24.8% in a year, the balanced RUPMI - +23%. SFR again outperformed NPFs: the yield on the expanded NPF pension fund portfolio (VEB.RF State Management Company) was 18.1% annually.

Among the top performers were funds with aggressive strategies: their corporate bond share significantly exceeded the market average. Two funds in the top three for pension reserve returns had a combined share of government debt and corporate bonds above the market.

The total number of complaints against NPFs increased by 0.5% (to 1,300), but complaints specifically about LTS surged 5.7 times (to around 440). Citizens complained about poor verbal information on risks and difficulties terminating contracts during the cooling-off period. However, complaints about illegal transfers between funds halved.

Not individual investment advice.