The amount of net investment income in pension assets increases
As of July 1, 2022, the pension savings of contributors to the Unified Accumulative Pension Fund amounted to about KZT13.4 trillion. The amount of investment income since the beginning of the functioning of the accumulative pension system, that is, since 1998, has exceeded KZT7.2 trillion. At the same time, the investment income received since 2014, the end of the consolidation of all pension assets in the UAPF, is about KZT6.4 trillion.
2022 is characterized by general instability in the financial markets against the backdrop of a worsening geopolitical situation. Since the beginning of the period, there has been an increase in inflation and volatility in the indicators of return on pension assets, depending on the market and currency revaluation of financial instruments and demonstrating both positive and negative indicators
However, due to the diversification of the portfolio by instruments, industries and currencies, positive investment income was earned during June, which covered the temporary decline in previous months. According to the results of the first half of the year, investment income in the amount of more than KZT338 billion was received on the accounts of depositors and recipients. The return for the last 12 months on pension assets secured by the National Bank of the Republic of Kazakhstan (from July 2021 to June 2022) amounted to 7.33%.
Recall that pension savings are long-term investments and it is advisable to analyze the amount of investment income for a period of at least 1 (one) year. Short-term data (weekly, monthly, etc.) are not indicative, because subject to constant changes in market conditions.
The investment return from the day the accumulative pension system was founded (1998) as of July 1, 2022, on an accrual basis, amounted to 700.42%, with inflation for the entire period of 614.68%. Thus, the real (i.e., exceeding inflation) return on pension assets for the period from the start of the accumulative pension system as of July 1, 2022 amounted to 85.74%.
But even if the instability of the financial markets will be long-term and the real return will be lower than inflation at the time of obtaining the right to pension benefit payments, the state guarantees the recipients the safety of compulsory pension contributions (CPC) and compulsory occupational pension contributions (COPC) in the UAPF in the amount of actually contributed funds, taking into account inflation.
The entire system of investment management and accounting for pension assets is transparent: every contributor has the opportunity to see his/her investment income in his personal account on the enpf.kz website or in a mobile application.
Information on the investment management of UAPF pension assets and on financial instruments in which UAPF pension assets are placed is published on the UAPF official website (www.enpf.kz) in the “Indicators/Investment Activity” section.
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The UAPF was established on August 22, 2013 on the basis of GNPF APF JSC. The UAPF founder and shareholder is the Government of the Republic of Kazakhstan represented by the State Institution “Committee of State Property and Privatization” of the Ministry of Finance of the Republic of Kazakhstan. UAPF pension assets are managed by the National Bank of the Republic of Kazakhstan. From January 1, 2016, the functions for developing proposals to improve the management of pension assets were transferred to the National Fund Management Council. In accordance with the pension legislation, the UAPF attracts compulsory pension contributions, compulsory occupational pension contributions, voluntary pension contributions, pension benefits, individual accounting of pension accumulations and benefits, provides the contributor (beneficiary) with information on the status of his pension accumulations (for more information visit www.enpf.kz)