Annual Pension Savings Surge for First Time Since Year's Start
Pension savings for Kazakhstanis don't just gather dust, thanks to the National Bank and private investment managers. The Unified Accumulative Pension Fund (UAPF) serves mainly as a "savings vault," managing investments to generate extra income for retirees.
To discuss the investment outcomes in 2025, let's take a look at the ups and downs faced by investors. In January, concerned citizens noticed a decrease in their savings due to investment losses experienced by the managers. However, there was a slight increase in investment income in February and March. But, the real turning point came in April as all managers finally recorded positive returns for contributors, a rare sight in those months.
April's profit fails to compensate past losses
Despite the positive returns in April, the previous setbacks were not easily covered by all parties involved. Here's a snapshot of annual returns as of May 1:
- National Bank of the RK: -1.05% and -5.94% for mandatory and voluntary contributions, respectively, and for mandatory pension contributions by employers (MPCE);
- Halyk Finance: 0.45%;
- "Sentras Securities": 2.32%;
- Jusan Invest: 1.38%;
- Halyk Global Markets: 1.62%;
- BCC Invest: 4.02%.
While all private companies have shifted to the black, the National Bank still struggles to compensate for its losses. As the current trend continues, they should recover soon.
What's significant is that short-term losses in the investment sector might not be as disastrous as one might think in the grand scheme of things.
Fret not, fellow Kazakhs, as your savings are safely fortified by state guarantees. You'll obtain compensation if you incur losses due to inflation. Similarly, the safety of your savings entrusted to private companies lies chiefly with the managers themselves.
Inquisitive minds might wonder about the role of the UAPF in the broader context of Kazakhstan's pension system. As the primary administrator of mandatory pension savings, the UAPF is tasked with managing individual pension savings accounts, notional pension accounts, and target savings accounts. Its services include account statements, updates, and digital access to information 24/7. Furthermore, the UAPF invests contributions diversely to ensure long-term financial sustainability, with a focus on maintaining a foreign currency allocation within the portfolio for stability against currency fluctuations.
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Explore Further
- The role of the Unified Accumulative Pension Fund (UAPF) in Kazakhstan's pension system
- UAPF's digital transformation
- UAPF's investment management strategies
- Despite the different investment outcomes among various financial institutions, the national bank is yet to fully recover from previous setbacks, indicating that the UAPF's investment strategies, which include foreign currency allocation to ensure stability against currency fluctuations, may need to be revisited.
- As the UAPF manages Kazakh pension savings, it's crucial to understand how their investment management strategies could potentially impact the future growth and sustainability of personal-finance savings for retirees.
