How much will the commission fee of UAPF JSC decrease in 2021?

By the Resolution of the Board of the National Bank of the Republic of Kazakhstan No. 132 dated November 27, 2020, the following values ​​of the commission remuneration of the Unified Accumulative Pension Fund Joint Stock Company for 2021 were established:

1) 2.0 percent of the amount of investment income;

2) 0.01 percent per month of pension assets.

It should be noted that according to Article 53 of the Law On Pension Provision in the Republic of Kazakhstan, the maximum size of the commission for the UAPF is set at an amount not exceeding 7.5 percent of investment income and 0.025 percent per month from pension assets.

Thus, the actual values ​​of the commission established from January 1, 2021 are lower than the legal limit values::

- from the amount of investment income - 3.75 times;

- from pension assets - 2.5 times.

The Unified Accumulative Pension Fund together with the National Bank of the Republic of Kazakhstan annually carries out work to reduce commission fees and optimize the Fund's expenses. Let us recall that the size of UAPF commissions is determined annually by the Board of the National Bank. In particular, for 2020, the size of the commission was significantly reduced from 5% to 2% of investment income and from 0.015% to 0.011% per month from pension assets.

In accordance with the law, UAPF receives both types of commission and covers all expenses, including those related to the investment management of pension assets. The growth of the UAPF's equity capital and the investment of its own assets make it possible to further reduce the size of the commission.

The decrease in the relative and absolute values ​​of the commission is the result of the work carried out by the National Bank as a fiduciary manager of pension assets, and the UAPF as a single operator for investment accounting of financial instruments, personalized accounting of individual pension saving accounts, and provision of pension services to contributors and beneficiaries.

In general, commission costs for investment management and custodial services were reduced, administrative expenses of the UAPF were reduced as a result of work carried out to automate business processes and increase employee productivity, as well as transfer most of pension services to electronic format, and also by covering part of administrative expenses from income from investing their own assets.

A significant reduction in the size of the commission has a positive effect on the growth of investment return and pension savings of contributors and beneficiaries.