Tashkent, Uzbekistan (UzDaily.com) -- The Majilis (lower house) of parliament of Kazakhstan adopted in the first reading amendments to the legislation providing for a mechanism for transferring part of pension assets to the management of private companies.

Currently, pension assets are managed by the Unified Accumulative Pension Fund (UAPF) together with the Pension Assets Management Council, which is chaired by the President of Kazakhstan. In 2018, part of the pension assets were transferred to external management, the size of assets of which is about US$ 970 million (3.2%) of the total volume of pension assets. As of 1 October 2020, pension assets hit the US$30 billion mark

According to the amendments, from 2021 Kazakhstanis wishing to earn additional income on their pension assets will be given the opportunity to transfer part of the assets (exceeding the minimum sufficiency threshold, the minimum and maximum size of which, depending on age, is US$6,900 and US$13,000) to private management companies.

Preliminary calculations on the thresholds of minimum sufficiency for different age categories showed that 720 thousand people will be able to use pension savings in 2021. (as of July of this year, there are about 2 million people in the country who have reached retirement age).

Commenting on this initiative, experts note that several principles are important for the preservation and replenishment of citizens’ pension savings: investment reliability, diversification and control over funds. According to economists, at present, depositors have no choice - more than 97% of pension savings are managed by the UAPF. At the same time, the investment activities of the Fund are often criticized for low efficiency. Thus, the return on pension assets from July 2019 to June 2020 for UAPF depositors was only 8%, while the average level of bank deposits is 10-12%.

Thus, the creation of the possibility of transferring a part of pension assets to private and foreign companies, on the one hand, will allow citizens to independently choose an organization for managing pension money, on the other hand, it will facilitate the involvement of assets in real turnover, which is relevant in the context of the financial crisis.