UAPF depositors received 938 billion tenge of net investment income

UAPF depositors received 938 billion tenge of net investment income

As of September 1, 2021, the amount of pension savings of contributors to the Unified Accumulative Pension Fund exceeded 12.9 trillion tenge. As you know, this amount includes pension contributions and investment income.

It is important to note that in just eight months from January 1 to September 1, 2021, net investment income in the amount of 938.9 billion tenge was credited to the accounts of UAPF depositors, which is 67 billion tenge or 8% more than in the same period last year. Yield on UAPF pension assets managed by the National Bank of the Republic of Kazakhstan since the beginning of the year as of September 1 amounted to 7.65%, with inflation of 5.8%. At the same time, the yield for the last 12 months was 10.68%, with inflation over the same period of 8.7%.

Let us recall that the amount of pension savings of contributors (recipients) is recalculated and revalued weekly 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 5.6 trillion tenge. As of September 1, 2021, the share of net investment income in total pension savings is 36.5%.

At the same time, the investment return from the date of the foundation of the most funded pension system (1998) as of September 1, 2021, on an accrual basis, amounted to 656.67%, inflation was 531.25%. Thus, the real return on pension assets for the period from the start of the accumulative pension system until September 1, 2021 amounted to 125.41%.

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 is published on the UAPF official website (www.enpf.kz) in the “Indicators/Investment Activity” section.

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 (and this is March 15, 2021) as of September 1, 2021 at the level of 5.1%. The yield for the same period of pension assets held in trust by Halyk Global Markets JSC is 4.7%; BCC Invest JSC 3.7%. Centras Securities JSC has been managing pension assets since April 1, 2021, during which time the investment yield was 5.9%.

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 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 Council for the management of the National Fund. 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).