One of the directions of the Social Code of the Republic of Kazakhstan, which entered into force on July 1, 2023, is the further improvement of the pension system, in connection with which the implementation of a number of innovations is envisaged.
The changes also apply to the amount of the UAPF commission on pension assets, which will decrease from 0.01 to 0.008 percent per month from July 1, 2023. Moreover, it cannot be more than the value defined as the product of 0.04 times the monthly calculation indicator established by the law on the republican budget and valid as of January 1 of the corresponding financial year, and the number of individual pension saving accounts of contributors (beneficiaries) with pension savings for accounting for compulsory pension contributions opened in the UAPF as of the 1st day of the corresponding calendar month.
Let us remind you that the commission remuneration of the UAPF was previously revised in 2021. From that time on, the UAPF commission amounted to no more than 0.01% of pension assets. Moreover, starting from 2021, the UAPF does not charge a commission on investment income. It is charged only by pension asset managers: the National Bank of the Republic of Kazakhstan (NBRK, no more than 2% of investment income) and investment portfolio managers (no more than 7.5% of investment income). At the same time, in 2023, the NBRK commission fee on investment income was 1.5%, and in 2022 - 1.8%.
Note that when creating the UAPF, it was legislated that the amount of commission for the UAPF should not exceed 7.5% of investment income and 0.025% per month of pension assets. This is two times less than what private non-state pension funds received. At the same time, the UAPF, together with the NBRK, annually worked to reduce commission fees and optimize the fund’s expenses. For example, in 2016-2017 the commission on pension assets was 0.0225%, in 2018 and 2019 - 0.015%, in 2020 - 0.011%.
Thus, during the operation of the UAPF, commission fees from pension assets were reduced by 68%.
The funds received are used primarily to develop services for contributors and beneficiaries, ensure the safety of information about the personal data of contributors and to other areas of the Fund’s activities. All services provided by UAPF are fully provided free of charge.