Kazakhstan entered the top twenty countries with the best pension system in the world

Kazakhstan entered the top twenty countries with the best pension system in the world

The largest German insurance company Allianz, one of the world leaders in the field of insurance, has prepared a report on the quality of the pension system and the stability of national pension systems. The Allianz Global Pension Report uses the prerequisites for the financial stability of the pension system, demographics and mutually corresponding pension payments from 70 countries (data for March 2020).

According to the results of the study, Kazakhstan entered the top twenty and became the leader among the countries of the Commonwealth of Independent States (CIS) with an indicator of 3.48. Of the former Soviet countries, only Latvia is in front of Kazakhstan, which took the 13th place. Estonia and Lithuania are ranked 25 and 27 respectively. Russia is 33rd in the ranking, while Ukraine is 56th.

Sweden's pension system was the best with 2.91 points, followed by Belgium with 2.92, Denmark with 2.96, New Zealand with 3.00, and the us pension system was the top five with 3.04 points. Also in the top ten were Australia, the Netherlands, Norway, Bulgaria and Canada. The list of 70 countries includes Sri Lanka, the United Arab Emirates and Lebanon.

Allianz used its Allianz pension index (API), which is based on a comprehensive analysis. The index consists of three small groups and includes 30 different dimensions, rated on a scale from 1 to 7 points, where 1 is the best score. By summarizing all differentiated subtotals by subgroup, the API allows you to rate each of the 70 countries included in the analysis from 1 to 7 points and get a comprehensive picture of the corresponding pension system.

The first subgroup covers demographic trends and financial opportunities. In particular, government spending on pensions, population aging, etc..

The second concerns the overall stability of the pension system. A special feature of the second subgroup is that the leading countries in these indicators are Indonesia and Bulgaria, which recently increased the retirement age and reduced the burden on the budget. But at the bottom of the second group are Saudi Arabia, Sri Lanka and Malaysia, the retirement age in these countries is still 60 years and below, there are no other demographic factors.

The third subgroup assesses the extent to which the pension system is able to provide a decent standard of living for a person in old age. Countries with high pension benefits, such as Austria, Italy, New Zealand and the Netherlands, are leading the way here. At the bottom of this small group are developing countries such as Nigeria and Laos.

As noted by Allianz chief economist Ludovic Subran, pension issues are now given less attention than other modern challenges.

-Before the outbreak of Covid-19 coronavirus infection, we faced a very big problem-climate change. We must now find solutions to these and other complex problems. But there is another problem that needs attention, which also needs to be discussed and a positive solution found. Thus, given the demographic changes, the policy aimed at today's pensioners does not meet the interests of the younger generation, which has to be considered both in the direct and variable sense. We hope that the analysis and ratings of the pension system conducted by us around the world will help to intensify public discussions about the correct structure of pension policy, the role of the state and pension funds (public and private). Despite the fact that the entire society is now massively concerned about Covid-19, pension policy is a very important issue. It should be noted that we are fighting the epidemic. A big crisis in the pension system is approaching all over the world, and this issue needs to be resolved today, " says Ludovic Subran.

Unfortunately, in the near future, all countries of the world will face the problem of pension provision, because in 30 years in 2050, the number of people of retirement age in the world will exceed 1.5 billion. A sharp change in the demographic situation is characterized by an increase in the global demographic burden of pensioners: by 2050, it will grow by 25-77% faster than in the last 70 years, since 1950. In many developing countries, this figure will more than double over the next three decades, which is less than half the time that Europe and North America have achieved this development. The most striking example is China, where this indicator of demographic load increases from 17% to 44%. However, the main cause of concern for developed countries is the absolute level of this indicator, for example, in Western Europe it reaches 51%.

This year, there was another problem with pension systems – the coronavirus epidemic (Covid-19), which hit the economy of almost all countries of the world hard. The decline in stock market quotations, prices and interest rates on energy resources affected the decline in pension assets, as well as personal savings of citizens. But the Covid-19 factor should be temporary, because since pension assets are long-term investments, it should not only subsequently return to previous achievements, but also increase returns. But the current problem is related to the recovery of the economy after the coronavirus epidemic.

Already, Allianz experts suggest that the governments of the countries should start a gradual reform of the pension system. One of these measures is the adjustment of the retirement age in accordance with life expectancy, as well as the possibility of employment of citizens after reaching retirement age. At the same time, the quality of life of a pensioner should not suffer and he should receive decent payments after reaching retirement age.

 


UAPF was established on August 22, 2013 on the basis of JSC "NPF" GNPF". The founder and shareholder of the UAPF is the Government of the Republic of Kazakhstan through the state property and privatization Committee of the Ministry of Finance of the Republic of Kazakhstan. Trust management of pension assets of the UAPF is carried out by the National Bank of the Republic of Kazakhstan. Since January 1, 2016, the functions of developing proposals for improving the efficiency of pension asset management have been transferred to the National Fund management Council, headed by the President of the Republic of Kazakhstan. 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 depositor (recipient) with information about the state of pension savings (more www.enpf.kz on the site).