Kazakh government approves rules for single pension fund

By bne IntelliNews September 27, 2013

bne -

The Kazakh government has approved rules for the Unified Pension Fund, a single state-controlled pension fund which will take over all pensions in the country and see the private pillar closed.

Prime Minister Serik Akhmetov signed a decree on the fund on September 26. It brings Kazakhstan a step closer to carrying out long planned and wide-reaching pensions reforms.

The new single pension fund, which is based on the existing state savings deposit, is expected to complete its purchase of the country's 10 private funds by the end of 2013. The fund, which will be managed by the central bank, will start operations at the beginning of next year. It will manage the country's entire pension stock, which amounted to $22.7bn as of June 1.

The reform of the pensions system has caused controversy within Kazakhstan. Brokers and investment banks have objected to the restrictions on asset classes that pension funds are allowed to invest in during the run up to the switch over. Many brokerages say they have been forced to lay off staff following a drop in investment activity.

Government plans to raise the retirement age for women meanwhile sparked public dissent, and provoked rare public protests in the first half of 2013. The government eventually offered a compromise, agreeing to extend the period for phasing in the retirement age increase.

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