The Ministry of Labor has commented on the abolition of the state guarantee for pension savings. The ministry believes that Kazakhstanis can now choose the company that will manage their pension savings, so the guarantee of protection against inflation is no longer needed. This was reported by Qazaqyia.kz citing Kursiv Media.
Social media and media outlets are currently discussing the norm to cancel the state guarantee for pension savings, which has been in effect since 2003. It provided that if the return on pension savings is lower than the inflation rate (i.e., they actually depreciate), the state will compensate for this difference.
The Ministry of Labor explained that this measure was in place because Kazakhstanis did not have the opportunity to influence the investment strategy for managing their pension savings. The rights of UAPF depositors were limited, and the state assumed obligations to compensate for losses in case of low returns.
The ministry emphasizes that now Kazakhstanis can independently choose the company that will manage their pension savings, as well as the investment strategy. Therefore, the logic of the state guarantee, according to the ministry, loses its significance. This, according to the state body, "does not correspond to the principles of fair distribution of public resources."
"It should also be taken into account that the payment of the state guarantee is of a one-time compensatory nature and does not affect the amount of regular pension payments in the long term. Accordingly, maintaining this guarantee is not a determining factor for ensuring an adequate level of pension provision," the Ministry of Labor noted.
At the same time, the pension system remains under multi-level state control.
Earlier, Kursiv wrote that Kazakhstanis continue to lose the real value of their pension savings, despite the recovery of investment returns in the Unified Accumulative Pension Fund.
According to statistics, only a few private managers are usually able to demonstrate investment returns above the inflation rate. Their results are often better than those of the National Bank.