Russian Federation Government Resolution No. 346 “On Realization of an Insured of his (her) Rights to Choosing the Investment Portfolio (Management Company)

On 19 June 2003 the Russian Federation Government has passed Resolution No. 346 "On Realization of an Insured of his (her) Rights to Choosing the Investment Portfolio (Management Company)" (the "Resolution"), which Resolution approves the “Rules of Informing the Insured on the Status of the Special Part of their Individual Face Accounts and Filing by the Insured Applications for Choosing an Investment Portfolio (Management Company) (the "Rules").

The Resolution and the Rules are designed to compliment the Russian Federation Federal Law "On Investment of Assets for Financing the Funded Part of the Labor Pensions in the Russian Federation" (the "Law on Investment").

The Rules set out a number of procedural requirements for informing the insured individuals on the status of their pension savings by the Pension Fund of Russia, as well as the procedures for filing applications by these individuals setting out their choice as to the management company for managing their pension savings. The Rules shall be applicable for 2003 only.

As such, prior to 1 August 2003 the Pension Fund of Russia must inform the insured individuals as to the sum of insurance payments for financing the funded part of the labor pension, that were received by the Fund from the insured’s employers in 2002, and the pro-forma of the application form to be filled out by the insured individual designating the management company to manage the said sums. This application is filed once a year no later than by 15 October 2003.

The sums subject to transfer by the Pension Fund of Russia to the designated management company include: (i) insurance payments for financing the funded part of the labor pension received by the Fund, and (ii) the net financial premium received by the Fund from investing the said sums.

An insured individual may file the pro-forma application to the relevant territorial department of the Pension Fund of Russia personally or via a representative. In the latter case a representative must ascertain its authority by a power of attorney. The application may be filed by post or electronically. If filed electronically, it must be accompanied by an electronic signature.