MOSCOW (Reuters) - Russia’s state development bank VEB plans to buy what it described as a blocking stake in Blagosostoyanie, one of the country’s biggest pension funds that is not involved in managing state pensions, the bank’s chairman said on Friday.
The bank did not give a size or value for the deal, but a blocking stake usually requires holding about 25% of a company’s shares although this can differ depending on a firm’s structure.
Non-state pension funds are more flexible than the fund managing state pensions in the ways they can invest and usually have higher returns, making them attractive as another source of saving for retirement alongside the state pension system.
Blagosostoyanie, whose biggest shareholders are now Gazprombank, Russian Railways and the Russian Agriculture Bank, has more than 1.3 million clients.
VEB’s chairman Igor Shuvalov did not say who would sell VEB the stake but he told reporters VEB would become one of the main owners alongside Russian Railways and Gazprombank.
He said the deal would take one or two months to complete.
VEB, which also manages state pension funds on behalf of Russia’s Pension Fund, would get access through the deal to the corporate pension funds Russian Railways is accumulating for its staff in Blagosostoyanie, which means “prosperity” in Russian.
Pension funds can offer a cheap source of funding for banks.
Russia has for years tried to encourage people to save for their pensions alongside state pensions, but the public has been wary of investing in the funds, as rules have often changed and as several non-state funds have been bought and sold.
Shuvalov said VEB wanted to create a fund “the government, the central bank, the employers and people could trust.”
Gazprombank and Russian Agriculture Bank did not immediately reply to Reuters requests for a comment. Russian Railways declined to comment.
Reporting by Darya Korsunskaya; Additional reporting by Gabrielle Tétrault-Farber and Gleb Stolyarov; Writing by Katya Golubkova; Editing by Kirsten Donovan and Edmund Blair