1. In August of this year I retired due to long service. I heard that I have the opportunity to receive my pension savings in full. Is it so? If so, how to do it and what can I use them for?
Yes, indeed it is so. From July 1, 2023, Kazakhstanis who have retired due to length of service have the right to use pension savings formed through compulsory pension contributions and can withdraw them in full to improve their living conditions and/or for medical treatment. But before submitting an application for withdrawal, it is necessary to clarify with the UAPF the availability and amount of savings. After this, you need to contact authorized operators. For the use of pension savings for housing, authorized operators are Housing Construction Savings Bank Otbasy Bank JSC (portal www.enpf-otbasy.kz), Halyk Bank of Kazakhstan JSC, Altyn Bank JSC, Bank CenterCredit JSC and Bank Freedom Finance Kazakhstan. The authorized operator for medical treatment is Otbasy Bank only.
2. My wife and I would like to transfer our pension savings to an investment company. How and what amount can we use? Are there any guarantees for the safety of deposits?
Having decided to transfer savings to one or more Investment Portfolio Managers (IPM), the contributor must contact the UAPF with an application, which can be submitted through a personal account on the Fund’s website www.enpf.kz or by personally contacting any branch. All necessary information and step-by-step instructions are posted on the website in the services section - TRANSFER OF PART OF PENSION SAVINGS TO TRUST MANAGEMENT, as well as on the Youtube channel in our video instructions.
With the entry into force of the Social Code on July 1, 2023, when transferring pension savings into trust management of companies managing an investment portfolio, the minimum adequacy threshold is not taken into account. Contributors can transfer up to 50% of savings formed through compulsory pension and compulsory occupational pension contributions. If there are voluntary pension savings, they can be transferred in full.
There are currently five portfolio managers in the market. Their full list can be found on the website www.enpf.kz.
These are companies that meet the requirements of the regulator - the Agency of the Republic of Kazakhstan for Regulation and Development of the Financial Market. These companies also entered into a trust management agreement with the UAPF and an agreement with the custodian bank. When choosing a management company, we advise you to carefully study its history, as well as its investment declaration, reviews of investment activities, experience and investment results.
The state guarantee of the safety of pension savings is provided only for savings managed by the National Bank of the Republic of Kazakhstan. When pension savings are transferred under the management of IPM, the state guarantee is replaced by a guarantee from the management company. It must provide a return not lower than the minimum level of return on assets. This level is calculated based on the weighted average return on pension assets transferred to the management of all IPMs operating in the pension asset management market.
3. According to the latest changes, the UAPF is reducing the commission on pension assets. What does this mean?
One of the directions of the Social Code of the Republic of Kazakhstan, which entered into force on July 1, 2023, is the further improvement of the pension system, in connection with which the implementation of a number of innovations is envisaged.
The changes also apply to the amount of the UAPF commission on pension assets, which will decrease from 0.01 to 0.008 percent per month from July 1, 2023. Moreover, it cannot be more than the value defined as the product of 0.04 times the monthly calculation indicator established by the law on the republican budget and valid as of January 1 of the corresponding financial year, and the number of individual pension saving accounts of contributors (beneficiaries) with pension savings for accounting for compulsory pension contributions opened in the UAPF as of the 1st day of the corresponding calendar month.
Let us remind you that the commission remuneration of the UAPF was previously revised in 2021. From that time on, the UAPF commission amounted to no more than 0.01% of pension assets. Moreover, starting from 2021, the UAPF does not charge a commission on investment income. It is charged only by pension asset managers: the National Bank of the Republic of Kazakhstan (NBRK, no more than 2% of investment income) and investment portfolio managers (no more than 7.5% of investment income). At the same time, in 2023, the NBRK commission fee on investment income was 1.5%, and in 2022 - 1.8%.
Note that when creating the UAPF, it was legislated that the amount of commission for the UAPF should not exceed 7.5% of investment income and 0.025% per month of pension assets. This is two times less than what private non-state pension funds received. At the same time, the UAPF, together with the NBRK, annually worked to reduce commission fees and optimize the fund’s expenses. For example, in 2016-2017 the commission on pension assets was 0.0225%, in 2018 and 2019 - 0.015%, in 2020 - 0.011%.
Thus, during the operation of the UAPF, commission fees from pension assets were reduced by 68%.
The funds received are used primarily to develop services for contributors and beneficiaries, ensure the safety of information about the personal data of contributors and to other areas of the Fund’s activities. All services provided by UAPF are fully provided free of charge.
4. I heard that the amount of payment for funeral expenses has increased. May I know what the current amount is?
Yes, from July 2023, according to the adopted Social Code, in the event of the death of a person who has pension savings in the UAPF, members of his family will receive a lump sum payment for funeral expenses from the pension savings of the deceased person within the amount of 94 times the monthly calculation index established for the corresponding financial year by the law on the republican budget (MCI), but not more than the funds of the deceased available on the individual pension account (IPSA).
If the balance of pension savings on the IPSA of the deceased person after making a lump sum funeral payment amounts to an amount not exceeding the MCI, this balance is paid as a funeral payment to the family members of the deceased. Let us recall that previously an application for a lump sum payment for a funeral could also be submitted by the persons who performed the burial, and the payment was an amount equal to 52.4 times the MCI.
In the event of the death of a person who has pension savings in the UAPF, they are inherited in the manner established by the legislation of the Republic of Kazakhstan
Find out in detail about the procedure, deadlines and list of documents required for the UAPF to make funeral payments to heirs on the UAPF website
5. My sister has a disability. Is she entitled to receive pension benefits before retirement age?
The UAPF notifies its contributors (beneficiaries) that persons who have pension savings in the UAPF formed through:
compulsory pension contributions and (or) compulsory occupational pension contributions, and disability of the first or second group established indefinitely, voluntary pension contributions, and disability regardless of the group and period of disability,
has the right to receive pension benefits according to the established schedule before the generally established retirement age.
The contributor (beneficiary) does not need to present documents confirming his status him/herself - the UAPF with the consent of the contributor (beneficiary), provided in accordance with the Law of the Republic of Kazakhstan On Personal Data and Their Protection, independently checks the presence of disability (group, validity period) via the Internet -service by requesting information from the Centralized Data Bank of Persons with Disabilities information system of the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan (MLSPP) through the State Corporation “Government for Citizens” (State Corporation) within the framework of an agreement concluded between the MLSPP, the State Corporation and UAPF.
You can submit an application for payment of pension savings by contacting the UAPF in person through the website enpf.kz, in the office or through an authorized person, or by mail.
Detailed instructions for submitting an application through the website enpf.kz can be found here.
Please note that the UAPF also organizes on-site services for persons with disabilities of the first or second group established for an indefinite period. In this case, a preliminary consultation is carried out, including checking the possibility of receiving services remotely, without traveling.
