The share of return on investment in pension savings is growing every year. In general, the investment income provided by the National Bank since the merger of all pension assets into the UAPF amounted to 6.3 trillion tenge.
Retirement savings are invested in financial instruments in different currencies. About 2/3 of investments are placed in tenge and about 1/3 - in foreign currency, most of foreign currency investments are in US dollars. Accordingly, the dollar exchange rate is reflected in investment income as part of pension assets: if the national currency strengthens, investment return may decrease, and if the dollar exchange rate rises, it can grow.
“It is worth emphasizing that pension savings are long-term investments and it is advisable to analyze the amount of investment return for a period of at least one year. Short-term data (weekly, monthly, etc.) are not representative as they dependent on constant changes in market conditions. For instance, the amount of net return on investment for the past 2021 distributed to the pension accounts of contributors (beneficiaries), amounted to about 1.4 trillion tenge, which exceeded the amount of contributions received during the year (1.3 trillion tenge). The yield on pension assets of the UAPF in 2021 under the management of the National Bank of Kazakhstan since the year beginning amounted to 11.13%, with an inflation of 8.4%,” the UAPF press service noted.
As of April 1, 2022, the investment return from the day the funded pension system was founded (1998) on an accrual basis amounted to 698.23% with inflation for the entire period of 580.40%. Thus, the real (i.e. exceeding inflation) return on pension assets for the period from the start of the funded pension system until April 1, 2022 amounted to 117.84%.
Source: https://www.enpf.kz/ru/about/press-center/news/index.php?ELEMENT_ID=12606
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