The Ministry of Labor and Social Protection of the Population has announced changes regarding pension savings. This was reported by Qazaqyia.kz citing Sputnik Kazakhstan.
In September of this year, a new procedure for managing pension savings will come into force. The main change is the complete removal of previously existing restrictions. Previously, depositors could transfer no more than 50% of their pension assets to private investment portfolio managers for trust management; now this restriction is completely eliminated.
Citizens are granted the right to transfer up to 100% of their savings to private management companies, say ministry specialists. Thus, Kazakhstanis can choose an investment strategy with low or high returns at their discretion and manage all funds in their pension account.
However, inflation risks will not be covered by budget funds. Because taxpayers' money should not be used to compensate for the results of citizens' private investment decisions. At the same time, requirements are imposed on private investment portfolio managers. They are obliged to compensate the difference from their own capital in case of a negative investment result. The company's equity capital must be at least 1.9 billion tenge.
It is worth noting that currently a special working group has begun to refine the pension reform. Experts are considering several options: introduction of an insurance component, the "4+1" model, accounting for work experience up to 40 years, as well as the model of Singapore's pension system.