National Welfare Fund of Russia of the Russian Federation was formed on February 1, 2008, after the Stabilization Fund was divided into the Reserve Fund proper and the National Welfare Fund. As of February 1, 2008, the size of the Fund was RUR 782.8 billion.
The National Welfare Fund represents a part of the federal budget funds subject to detached accounting and management for purposes of co-financing of optional pension savings of Russian citizens as well as for purposes of balancing (offsetting the deficit) of the budget of the Pension Fund of the Russian Federation. The money of the Fund will be invested in corporate bonds and stocks outside Russia.
The National Welfare Fund is formed from:
oil and gas revenues of the budget in a volume exceeding the volume of oil and gas transfer adopted for the relevant financial year in cases when the accumulated funds of the Reserve Fund has reached (or exceeded) its mandatory size;
revenue from the management of funds in the National Welfare Fund.
The Stabilization Fund needs to be divided into two parts to raise the return on its investments. The Reserve Fund will store funds amounting to 10 percent of GDP. They will be invested conservatively in currencies of other countries. Meanwhile, all Stabilization Fund money not channeled into the Reserve Fund will be directed into the National Welfare Fund that will invest in more risky instruments.
