Net investment income of UAPF contributors as of August 1, 2021

The share of net investment income in total pension savings amounted to 36.1%

The amount of pension savings of contributors to the Unified Accumulative Pension Fund as of August 1, 2021 amounted to 12.8 trillion tenge. This amount includes pension contributions and investment income.

For 7 months of 2021, net investment income in the amount of 798.3 billion tenge was credited to the accounts of depositors, thereby blocking the volume of incoming contributions for all types of contracts. For comparison, for the same period last year, it amounted to 752.9 billion rubles.

At the same time, the profitability of UAPF pension assets managed by the National Bank of the Republic of Kazakhstan since the beginning of the year amounted to 6.48% with inflation of 5.3% over the same period. Over the past 12 months, the yield on pension assets managed by the NBRK has been 10.56% with inflation of 8.4%.

Recall that pension contributions coming to individual pension accounts (IPA), which are kept by the UAPF, are invested by the trustee of pension assets - the National Bank of the Republic of Kazakhstan - in various financial instruments.

The amount of pension savings of contributors (recipients) is recalculated and re-evaluated on a weekly basis in accordance with the results of investing pension assets. Investment income includes income in the form of interest on securities (deposits and other transactions), income in the form of market revaluation of financial instruments, income in the form of currency revaluation, income on assets under external management, etc.

In general, the investment income provided by the National Bank since the merger of all pension assets into the UAPF amounted to over 5.5 trillion tenge. As of August 1, 2021, the share of net investment income in total pension savings is 36.1%.

If we take the period from the date of foundation of the most accumulative pension system of Kazakhstan in 1998, then the net investment income amounted to 6.3 trillion tenge.

The investment return as of August 1, 2021, on a cumulative basis, was 648.44%. At the same time, inflation amounted to 528.27%. Thus, the real return on pension assets for the period from the start of the funded pension system until August 1, 2021 amounted to 120.17%.

In addition to the National Bank, UAPF depositors can transfer part of their savings to investment portfolio management companies (IPM). At the moment, the UAPF has concluded an agreement on trust management of pension assets with four IPMs. You can get acquainted with information about them and study their investment declarations on the website enpf.kz in the section "Services" - "Register of Investment Portfolio Managers".

Recall that after receiving pension assets from the UAPF, the IPM invests them in permitted financial instruments specified in the Rules for the implementation of investment portfolio management activities, approved by the Resolution of the Board of the National Bank of the Republic of Kazakhstan dated February 3, 2014 No. 10, and provided for in the Investment Declaration of the IPM.

It should be noted that the pension assets held in trust by Jusan Invest JSC showed a profitability from the beginning of activity (March 15, 2021) at the level of 4.13%. The yield on pension assets held in trust by Halyk Global Markets JSC for the same period was 2.96%; BCC Invest JSC 2.77%. Centras Securities JSC has been managing pension assets since April 1, 2021, during which time the investment return was 3.99%.

It is worth emphasizing 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 entire system of investment management and accounting for pension assets is transparent: each contributor has the opportunity to see his 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 by the National Bank of the Republic of Kazakhstan and investment portfolio managers is published on the official website of UAPF (www.enpf.kz) in the section "Indicators / Investment activity".

During the period when pension savings are under the management of the National Bank until the depositor reaches retirement age, there is a guarantee of the safety of pension savings, taking into account the level of inflation. When transferring pension savings to the management of the IPM, the guarantee of the state is replaced by the guarantee of the management company to ensure the minimum level of profitability of pension assets. The minimum level of return is calculated on the basis of the weighted average return on pension assets transferred to the management of a IPM operating on the market.

UAPF was established on August 22, 2013 on the basis of SAPF APF JSC. The founder and shareholder of the UAPF 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. Trust management of UAPF pension assets is carried out by the National Bank of the Republic of Kazakhstan. Since January 1, 2016, the functions of developing proposals to improve the efficiency of pension assets management have been transferred to the National Fund Management Council. In accordance with the pension legislation, the UAPF attracts mandatory pension contributions, mandatory professional pension contributions, voluntary pension contributions, pension payments, individual accounting of pension savings and payments, provides the contributor (recipient) with information on the state of his pension savings (for more details, see www.enpf.kz).