Starting September 7, new rules for managing pension savings have come into effect in Kazakhstan. Citizens can now transfer 100% of their pension funds to private asset management companies, reports infohub.kz.
Previously, Kazakhstani citizens were only allowed to entrust half of their savings to private companies, but this restriction has now been lifted. Each contributor decides independently which management company to transfer their funds to, based on performance indicators and other criteria.
An important innovation is that management companies are now allowed to offer various investment strategies: conservative, moderate, and risky. As explained by the Unified Accumulative Pension Fund (UAPF), the conservative portfolio is available to all contributors, with returns assessed over 12 months. The moderate strategy can be chosen by those who have more than three years until retirement, with results evaluated over 36 months. The risky portfolio is only available to those with more than 13 years until retirement, and its performance is assessed over 60 months.
The new rules are designed to allow the formation of pension portfolios with varying levels of risk. However, in practice, the system is currently working somewhat differently than intended. At present, contributors cannot choose a strategy within a specific management company. According to UAPF data, each of the existing organizations offers only one type of portfolio: BCC Invest – conservative, Alatau City Invest – moderate, Halyk Finance – conservative, Halyk Global Market – conservative, Tansar Capital – moderate, and Centras Securities – conservative.
It is possible that the choice of strategies will expand in the future, but for now, managers operate under a single specific scheme. Nevertheless, Kazakhstani citizens can independently assess the performance of management companies and decide whether to transfer their funds. It is not necessary to transfer all savings to one company – they can be distributed among several. It is also possible to return assets to the management of the National Bank.
Earlier, Kazakhstani citizens were warned that private companies may charge fees for their services, which should also be taken into account when making a decision.