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Kazakhstan is on 20th place in the world ranking of pension systems

As of March 1, 2024, pension savings (PS) of citizens of Kazakhstan in the UAPF formed through mandatory pension contributions (MPC), mandatory professional pension contributions (MPPC) and voluntary pension contributions (VPC), reached 18.5 trillion tenge, by 22.2% more than in the same period last year. It is worth noting that the current growth in pension savings of the population is the highest in the last five years, reports Ranking.kz.
Kazakhstan is on 20th place in the world ranking of pension systems

As of March 1, 2024, the average amount of savings under MPC amounted to 1.6 million tenge, 20.6% more than a year earlier. The calculation includes the individual pension funds of all depositors, those who have just begun to accumulate funds and those who have been making contributions for 25 years. The amount of savings largely depends on the regularity and volume of contributions, based on the income of the depositor.

Regionally, the largest volume of pension savings is observed in Almaty: 3.6 trillion tenge, significantly more than the indicators of other regions. Part of this phenomenon can be explained by the size of the city's population - the more people, the more savings, but this is not the only reason. It is also worth taking into account the level of income, the level of the shadow economy, the financial discipline of citizens and much more.

The problem of the shadow employment market still remains relevant in the country. The population continues to receive salaries “in envelopes”, and pension accounts stay empty. As a result, it is common people and not employers who suffer. Let's look at the statistics for clarity: the amount of the scheduled average monthly payment from the UAPF (in connection with reaching retirement age) is 34,075 tenge, and the maximum amount of monthly payment is 945,752 tenge. Such a staggering difference clearly argues for official pay.

Almaty, Ulytau and Abay regions generated the least amount of pension savings. The question of population arises again: Almaty region is the third largest in population and the last in terms of pension savings. The indicators in the region are worse than even in the newly formed regions.

The above problems are also noted by international specialized agencies. Thus, for example, the Mercer CFA Institute in its annual report outlined a number of important recommendations for pension systems of all countries. You can see them in the infographic.

Kazakhstani pension system was included in the Global Pension Index of the Mercer CFA Institute for the first time in 2023, and based on the results of a comprehensive analysis and assessment, took 20th place in this ranking, which was considered a fairly positive result. The infographics below show that the country is ahead of many developed countries.

The Mercer CFA Institute evaluates pension systems based on three sub-indices - “adequacy” (a 40% share), “sustainability” (35%) and “integrity” (25%), which include more than 50 indicators. To conduct a complete and objective assessment of pension systems based on these indicators, among other things, information from open international sources, including data from the OECD, the World Bank, the International Labor Organization, the research and analytical division of the Economist Group, etc., was used.  

According to the results of the MCGPI Index analysis, the final assessment of Kazakhstani pension system is 64.9 points - this is higher than the average for all analyzed countries.

Source: https://ranking.kz/reviews/banking-and-finance/v-reytinge-pensionnyh-sistem-kazahstan-raspolozhilsya-na-20-m-meste-operediv-mnozhestvo-razvityh-stran-obzor-situatsii.html

Photos are from open sources.

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