I decided not to withdraw my pension savings above the sufficiency threshold, what risks and opportunities do I have?
The accumulative pension system of Kazakhstan is designed in such a way that it is maximally protected from risks. For 23 years, despite a number of financial crises in the global economy, it has maintained stability. Today, Kazakhstan is the only country in the world where there is a state guarantee of the safety of citizens' pension savings from inflation. The Law “On Pension Provision in the Republic of Kazakhstan” guarantees recipients the safety of mandatory pension contributions and mandatory professional pension contributions to the UAPF in the amount of actually paid contributions, taking into account the inflation rate at the time of obtaining the right to pension payments. If, by the time of retirement, savings are below inflation, then this difference is compensated to the recipient from the republican budget upon receipt of the first pension payment from the UAPF.
If you have in mind the risks when deciding on the use of pension savings, then we would like to draw your attention to the fact that the early withdrawal of pension savings will affect, first of all, the state of the individual pension account of the contributor who has withdrawn the money, and, as a result, his future pension payments. Citizens' pension savings are accounted for individually and the savings are formed from personal pension contributions, investment income and its personal withdrawals (or pension payments), if any.
It should be understood that the funds that remain on the IPA within the minimum sufficiency threshold allow the depositor to be provided with pension payments in an amount not lower than the minimum pension. This is a small amount, which consists of payments from the UAPF and the minimum basic pension, which is 54% of the subsistence level. In order to save on an individual pension account an amount sufficient to provide the recipient with at least a minimum payment upon reaching retirement age, the thresholds for the adequacy of pension savings are recalculated annually. At the same time, for a decent pension provision, it is necessary to have good savings, which are formed from regular, timely contributions, in full from the income received.
By the way, as an option, in your case, you can transfer your pension savings above the sufficiency threshold to investment portfolio management companies (IPM), that is, try to take a risk and become your own investor and, possibly, get more income. Moreover, this amount will be returned to your pension account in the future, and it will not be money spent, but multiplied, from which you will subsequently receive your pension payments.
To do this, you need to familiarize yourself with the investment declaration of the manager and understand how and in what he will invest your funds. Now there are four IPMs on the market and you will find full information about them on the enpf.kz website.