Kazakhstan outlines pension reform and plans to expand professional asset management

Kazakhstan plans to give professional asset managers a larger role in managing retirement savings held by the Unified Accumulative Pension Fund. National Bank Chairman Timur Suleimenov said selected firms would receive portions of the fund’s assets through a competitive process.

The National Bank currently manages the UAPF’s pension assets, as it has since 2013. Contributors gained the option several years ago to transfer up to half of their savings to private managers, but only about 120 billion to 130 billion tenge is currently managed this way, according to Suleimenov.

He said the fund holds large amounts of long-term money that could be invested more effectively. Without changing the rules for managing pension assets, he said, Kazakhstan would neither develop its securities market nor increase investment returns for retirees.

“

As the primary manager, we will allocate the portfolios. We will invite the most substantial and financially stable professional management teams, our local ones, who will receive various volumes of these assets under management based on a competition demonstrating their strategies and capabilities.

Contributors will still be able to choose a manager and transfer their savings independently. For assets that remain under UAPF management, the National Bank will select managers through competitive bidding. Their performance will be reviewed regularly. Firms that generate strong returns will keep their portfolios, while the bank can withdraw funds from managers with poor results and assign them elsewhere.

The reform will be introduced gradually. Officials expect to approve the program by the end of 2026, prepare the necessary legislative changes afterward and launch the new system by the end of 2027. The planned system also includes age-based portfolios, with younger contributors receiving investments carrying higher risks and potentially higher returns, while portfolios would become more conservative as contributors approach retirement.

“

Without resetting the rules and approaches to pension money management, we will neither develop the securities market nor increase the returns on investments for retirees.