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Kazakhstanis will soon receive bonuses on their pension savings، tied to investment returns exceeding inflation rates. This initiative، announced by the Unified Accumulation Pension Fund (UAPF)، the National Bank، and private management companies، aims to safeguard savings against rising prices.

Inflation's Impact on Pension Funds

While the investment income on pension savings in Kazakhstan fell below inflation in 2025، experts emphasize that evaluating pension investments solely on a one-year horizon is insufficient. Pension assets are long-term instruments، and their true performance can only be assessed over several years.

Evolving Pension Management System

Lazzat Amirgaliyeva، head of the UAPF's investment portfolio analysis department، highlighted the gradual expansion of the pension savings management system. Savers now have the option to transfer a portion of their funds to private management companies and select investment strategies.

Since January 2021، individuals could transfer pension savings exceeding a minimum sufficiency threshold to private managers. This was further expanded on July 1، 2023، allowing up to 50% of mandatory pension and mandatory occupational pension savings، and 100% of voluntary pension savings، to be managed by private entities.

Pension Asset Growth and Investment Returns

The total volume of pension assets is steadily increasing. As of January 1، 2026، savings amounted to approximately 26 trillion tenge. The majority of these funds، about 99.66%، remain with the National Bank، while approximately 0.34% is managed by private investment companies.

Investment returns on pension assets are generated from various sources، with approximately 78% coming from securities and reverse REPO operations. Additional income includes gains and losses from market revaluation of securities، currency exchange rate differences، and returns from externally managed shares.

For 2025، the total investment return on pension assets reached 1.825 trillion tenge. The UAPF now evaluates managers not only on absolute profitability but also on performance against predetermined benchmarks aligned with their chosen strategies.

New Benchmarks for Manager Evaluation

A significant development for 2026 is the introduction of a composite index to evaluate the performance of management companies. This system is designed to align with market logic، where a manager's results are compared against a predefined benchmark rather than just inflation or competitors.

Amirgaliyeva explained that the new benchmark incorporates both Kazakhstani and international indicators، including the KASE، MSCI، and Bloomberg Global Aggregate indices. This composite index will be used to assess the effectiveness of investment portfolio management.

Investment Strategy Options: K12، K36، and K60

The selection logic is now structured around three criteria: K12، K36، and K60، which differ in their time horizons and portfolio compositions. These range from conservative options to strategies with longer-term potential and higher volatility.

For instance، the K36 criterion is for savers with less than three years until retirement، while K60 is for those with thirteen years remaining. To enhance transparency، the UAPF has launched the invest.enpf.kz portal، where savers can view portfolio structures، investment criteria، and the profitability of management companies.

Understanding Potential Declines in Returns

Nurzhan Nurgazin، Deputy Director of the National Bank of Kazakhstan's Monetary Operations Department، explained why pension portfolio returns might decrease during certain periods، even without significant errors from managers.

As of March 2026، pension assets reached approximately 26 trillion tenge، growing by about 12% throughout 2025. The portfolio structure remains relatively stable، with around 60% in tenge-denominated instruments and 40% in foreign currency instruments. Nurgazin noted that the foreign currency portion has gradually increased from 30% to 40% since 2017، which is important for long-term diversification.

A primary reason for potential return dips is the revaluation of bonds. When inflation rises and the base interest rate increases، the market value of previously purchased bonds can decrease، leading to negative revaluation. Conversely، when rates fall، bond prices tend to rise.

Nurgazin stressed that pension assets are long-term investments، and their performance should not be measured over short periods. Since the consolidation of pension assets in 2014، cumulative returns have consistently outpaced cumulative inflation over the long term.

Insights from Private Management Companies

Nurlan Mustafin، Deputy Director of the Asset Management Department at Halyk Finance، shared his company's perspective. Halyk Finance has been managing pension assets since late 2022 and evaluates results over a three-year period.

For the period of 2023-2025، their average annual return was approximately 14.4%. Mustafin described 2025 as a challenging year due to rising inflation and a significant tightening of monetary policy، which led to a decrease in bond values as market yields increased.

With bonds constituting about 70% of their portfolio، the revaluation of these securities significantly impacted overall returns، though Mustafin considers this a temporary factor.

Currently، tenge-denominated instruments appear more attractive due to higher yield differentials، offering returns of around 16-17% compared to approximately 3.5% for dollar-denominated instruments. Halyk Finance projects a three-year return of 15-18% in tenge، assuming a 70% allocation to tenge and 30% to foreign currency assets.

Mustafin added that their goal is to outperform market benchmarks through active portfolio management and diversification across various instruments.

Experts agree that current return fluctuations are largely linked to the high interest rate cycle. As inflation subsides and the base rate decreases، bond values are expected to rise، potentially boosting pension asset returns through positive revaluation.

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