This is not a rhetorical question. Especially in the light of recent events, when increased instability in the financial markets related to the COVID-19 coronavirus, changes in the exchange rate, oil prices and other factors affected the change in investment income, when passions boiled over the payment of state benefits for loss of income due to the quarantine in the amount of 42,500 tenge, it was even suggested that this money was taken from the UAPF. Zhanat Kurmanov, Chairman of the Board of JSC "UAPF", addressed the media with an explanation of the situation at the end of April.
Today we want to focus readers ' attention on the most important points concerning the pension savings of our citizens.
First, pension savings are the property of the depositor, and their safety is guaranteed by the state. No one can dispose of them without the will of the depositor, pay them to third parties or not for their intended purpose.
Second: savings are continuously invested, i.e. they do not" lie", but" work " for the depositor. The national Bank of Kazakhstan invests pension assets.The main principle of investment is their safety, i.e. minimizing the risks of their loss for any reason. Pension savings should grow to bring a stable profit and ensure a comfortable old age.
Third, an increasing part of all pension savings is investment income accrued to the account of each depositor on a daily basis, and any depositor can "24/7" monitor their savings through the UAPF mobile app or their personal account on the UAPF website.
Now about all this in more detail.
Pension assets of depositors are under comprehensive control, and their safety is guaranteed by the state. This is the money of our citizens, set aside for old age, which can only be obtained under the conditions established by law.
All state benefits are paid from the state budget or extra-budgetary funds of the Government, and funds in the uapf do not belong to SUCH funds. This is the personal money of depositors.
The UAPF joint-stock company itself is an authorized operator for collecting, processing, accounting and calculating pension savings and payments, providing pension services to the population, and investment management of pension assets is carried out by the national Bank.
Pension assets are invested in various financial instruments in order to protect pension savings from inflation and provide income above inflation.
When choosing financial instruments for investment, the national Bank strives for the maximum balance in the risk-return ratio. If the situation in the financial markets changes and the yield on certain investment instruments decreases, this is compensated by the yield on other instruments.
Each depositor has an individual pension account (IPS) in the UAPF, which takes into account all his incoming pension contributions, as well as received investment income minus the Commission fee established by law. The Commission fee in 2020 is 2.0 percent of the investment income received and 0.011 percent per month of pension assets. This is 3.7 times and 2.3 times lower, respectively,than the legal norms.
Despite the fact that pension savings are invested both within Kazakhstan and on international markets, in assets and currencies of different countries, at the end of each day, the UAPF reassesses the savings of citizens. Investment income is accrued to the depositor on a daily basis and is available to him at the end of each day. Even if a person already receives pension payments from the UAPF, investment income continues to accrue on their savings. It depends on the amount of savings of each depositor and the profitability of financial instruments in which depositors ' money is invested. In other words, investment income is distributed daily to depositors ' accounts in proportion to their savings.
Let's see clearly, in numbers, how the investment income is calculated. Let's start with the fact that it depends on the current value of the conventional unit of pension assets (UE), calculated by the UAPF for each day. The individual pension savings of each depositor are accounted for in tenge and in the amount of UE.
The amount of The depositor's UEN IPS is calculated for each receipt of their pension contributions by dividing the amount of the received contribution by the current value of the UE. Let's look at a specific example. Let's assume that your IPS received a pension contribution of 10,000 tenge. If the cost of the UE, for example, on March 01, 2020goda -806.3948806, the number of UE that will be credited to Your IPS will be 10,000 tenge / 806.3948806= 12.4008724.
When calculating pension savings on a different date, for example, on may 01, 2020goda, taking into account the received investment income, the new current value of the UE is taken into account, for example, 835,2253117. The number of UNITS that were deducted from Your IPS is subject to revaluation at the new current value of the UNIT as follows: 12,4008724 * 835,2253117 = 10,357.52 tenge.
Thus, Your pension savings as of may 01, 2020 will amount to 10,357. 52 tenge, while the pension savings in this example consist of a contribution amount of 10,000 tenge and investment income of 357.52 tenge. The increase in savings is related to the accrual of investment income, which is reflected in the increase in the cost of the UE.
The cost of UE is updated daily on the main page of the site ЕНПФwww.enpf.kz
Thus, the amount of pension savings of each depositor depends on the amount of contributions and investment income, as well as on the timeliness and frequency of receipt of contributions. Therefore, it is important that contributions to the IPS are received regularly and in full.
As a result of investment activity and due to the volatility of foreign exchange rates, changes in the market value of financial instruments, the amount of accrued investment income may change daily. Therefore, it is better to evaluate investment management over a long period of investment (at least a year) and in the long term.
For example, for the past 2019, the net investment income accrued on the IPS of UAPF depositors amounted to 641.8 billion tenge, the yield was 6.57% with inflation of 5.4%. Thus, the real (above inflation) return on pension assets is positive.
Since the beginning of 2020, as of may 01, more than 536 billion tenge of investment income has been accrued on the IPS of depositors, which is 381.1 billion tenge more than in the same period last year (154.9 billion tenge). This indicates that investment income is not a fixed amount, depending on the value of financial instruments and the situation on the financial market as a whole.
The law on pension provision provides for a state guarantee of the safety of savings, in the amount of actually made mandatory pension contributions and mandatory occupational pension contributions, taking into account the level of inflation at the time when the depositor receives the right to pension payments.The amount of pension savings depends on the amount of contributions,the frequency of their receipt and investment income.
Here is such a simple economy and mathematics, understanding which, each depositor will be able to understand how his savings grow, control what happens to them and whether they are not paid for the wrong purpose.
For more information about the figures for today, by month and year separately, with information on investment management of pension assets, as well as data on the structure of the investment portfolio by financial instruments, you can monthly on the Fund's website in the section "Indicators" - "Investment activity" in the following subsections:
- "Investment review" https://www.enpf.kz/ru/indicators/invest/review.php
- "Structure of the investment portfolio of pension assets»
https://www.enpf.kz/ru/indicators/invest/structure.php