Labor Minister comments on suggested single pension fund

Labor Minister Serik Abdenov voiced the reasons why a single pension fund is needed in Kazakhstan, a Tengrinews.kz journalist reports. “President Nazarbayev’s instruction on launching a single pension fund is a timely response to the current situation in the pension system. What benefits do we expect? First of all, the measure will enable the government to exercise proper control over all the pension accumulation accounts and make sure the depositors database is credible. Secondly, it is important to secure reasonable return on the pension funds’ assets. Thirdly, the government will ensure effective management of each individual account”, Mr. Abdenov told a briefing. He reminded that the Government in partnership with the World Bank experts had analyzed performance of the country’s pensions funds back to 1998. According to him, the World Bank’s experts concluded the funds are not effective in managing the depositors’ savings. The Labor Ministry has revealed irregularities related to individual accounts record keeping. “For instance, over 750 000 accounts were non-performing due to deaths of their owners or change of permanent residence”, the Minister said. When asked where the pension funds’ money could be invested, the Minister answered that the Government suggests channeling the money to support S&MBs within the Business Development Roadmap – 2020 as well as to finance infrastructure projects. “The goal is to secure a reasonable return on the assets”, the Minister said, adding that the President instructed to come up with suggestions on launching a single pension fund within a month.