Merger of pension funds to form a single entity complete in Kazakhstan31 march 2014, 14:24
Kazakhstan-based pension funds have united to form the State-run Single Pension Fund, a Tengrinews.kz journalist reports, citing Ruslan Erdenayev, vice chairman of the Fund’s Managing Board as saying at a round-table discussion.
All the savings (including the investment income) of all depositors have been transferred from privately-held funds to the single entity. Depositors are already able to obtain a statement on their savings at any of the Fund’s outlets.
Altogether, there are 9.7 million accounts, with the overall savings amount standing at $21.3 billion. Kazakhstan’s Central Bank manages the assets.
Tengrinews.kz reported, citing the country’s Central Bank Governor Kairat Kelimbetov as saying in the Majilis (lower chamber) November 13, 2013 that all the pension assets would be united into the state-run single pension fund before April 2014.
Kazakhstan’s President Nursultan Nazarbayev instructed the Government late January to merge all the pension funds into a single government-owned entity.
The Single Pension Fund was launched in August 2013.
As of December 1, 2012 there were 11 pension funds operating in Kazakhstan, with combined savings standing at around $21 billion.
Before the decision on merging all the country’s private pension funds, PM Serik Akhmetov said that “the current service fee rates applied by the country’s pension funds have been reducing the people’s pension savings by 26%”.
“According to experts, within the average saving period, the applicable service fee rates have been slashing people’s savings by about 26%. It is an excessively high rate. Given all that, the decision to launch a single pension fund [to replace all the pension funds operating in Kazakhstan] was very reasonable on the part of the Government”, the PM said May 5.
“This scheme of managing has brought about a number of problems … It’s obvious that private pension funds have failed to cover all working people with saving plans”, the PM admitted at that time.
According to him, only 5.6 million out of 8.4 million working people were covered with saving plans, with only 4 million people making pension deductions on a regular basis, which was less than half of working population.