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There are plans to put up to 30% of Kazakhstanis’ pension savings under the management of private investment companies (lsm.kz). Mandatory pension contributions will continue to go to the Unified Accumulative Pension Fund (UAPF). This target is set out in the capital market development programme for 2026–2030. The plan is to start with a pilot involving a limited amount of assets.
Who will manage the pension money
Investment portfolio managers, or IPMs, will manage a share of the assets. These are private companies that will be tasked with investing pension money. Companies participating in the pilot are expected to be selected through a competitive process.
The companies will receive assets under investment mandates. Put simply, they will be tasked with managing a specific share of the pension portfolio. We explain what will change for savers in a separate article.
How much could go to private managers
The capital market development programme sets a target of up to 30%. This should be distinguished from the first stage: the pilot will involve transferring a limited amount of pension assets.
Here’s an important detail: the target applies to pension assets as a whole. It does not mean that 30% of each saver’s savings has already been transferred to private managers. The plan to transfer up to 30% of pension assets is part of a review of how pension money is managed.
Where pension contributions will continue to go
Mandatory pension contributions will still go to the Unified Accumulative Pension Fund, or UAPF. The plan concerns the management of assets already accumulated.
Private companies will invest the share of pension money entrusted to them. The National Bank will monitor how they meet the terms of their mandates.
What pension money can be invested in
The most liquid asset classes have been chosen for the pilot. These are securities that are easier to sell on the market. The list includes:
- government securities, or GS;
- high-quality corporate bonds;
- local equities.
Bonds are debt securities issued by governments or companies. Shares give investors a stake in a company. The transfer of assets to managers is expected to begin through a pilot run by the Agency for Regulation and Development of the Financial Market, or ARDFM.
Who will oversee private managers
The National Bank will regularly assess the quality of management and compliance with the mandates. Based on the results, it will be able to maintain, increase or reduce the amount of assets managed by a particular company.
The National Bank will also be able to stop transferring assets to that manager. If necessary, the assets concerned may be transferred to another IPM. The document links these decisions to protecting savers’ interests.
Put simply
The plan would bring private companies into the management of a share of pension money. Mandatory contributions will continue to go to the UAPF, while the National Bank will oversee the managers’ work.
If you keep track of your pension savings, distinguish between the target of up to 30% and actual asset transfers. The next step should be a pilot involving a limited amount of assets and a competitive selection process for companies.
