Life pension or investment income - what will be offered to Kazakhstanis

Tengrinews.kz — To date, Kazakhstanis have access to immediate, deferred, and joint (spousal) retirement annuities, which provide lifelong insurance payouts. In the foreseeable future, citizens are expected to be offered a wider choice of pension solutions, citing the Agency for Regulation and Development of the Financial Market (ARDFM).
The initiative to expand the range of savings-based insurance products is contained in the draft program for the development of the insurance market until 2030. The document was developed by the ARDFM on the instructions of the Head of State, in collaboration with market participants and the expert community.
Note. A retirement annuity is an insurance contract under which an insurance organization pays a person a regular retirement income from their savings, assuming the risk of longevity and ensuring payments for a specified period or for life.
The guaranteed retirement annuity will remain the core product. It provides lifelong payouts, while the insurance organization assumes the risk that a person may live longer than expected, requiring more funds for pension payments. The existing product will become more flexible through various options for increasing (indexing) pension payments.
An investment-linked annuity (unit-linked) will be introduced. It will combine pension protection with the opportunity to earn investment income. The outcome will depend on the performance of the selected investment portfolio or market index. In the future, savings can be converted into a guaranteed retirement annuity with lifelong payments.
Another option will be a hybrid annuity. Under this model, funds will be immediately split into two parts: one providing guaranteed lifelong payments, and the other invested to generate additional income. Thus, a citizen will be able to receive a guaranteed pension and participate in investment income simultaneously.

"To simplify the selection process, there are plans to create a unified digital pension planning service. It will allow citizens to compare pension products, calculate potential future payments, choose a suitable option, and receive a personal pension plan," the Agency reported.

This system will make retirement products more transparent and accessible, expand opportunities for citizens to build additional retirement income, and increase their engagement in long-term financial planning.
As a reminder, starting September 7, opportunities for contributors to the Unified Accumulative Pension Fund (UAPF) will expand in Kazakhstan. Citizens will have the right to transfer up to 100 percent of the funds formed through mandatory pension contributions and mandatory professional pension contributions to private investment portfolio managers.