Starting January 1, 2026, Kazakhstan’s funded pension system will enter a new phase. Investment portfolio managers (IPMs) will no longer be assessed primarily by comparing their performance with one another. Instead, their results will be measured against objective market benchmarks – composite Ki indices, DKNews.kz reports.
This marks a fundamental shift in approach: from relative comparisons within the system to outcome-oriented investing, aligned with both local and global capital markets.
In practical terms, pension assets will now be evaluated not in isolation, but in the context of real market dynamics.
Why composite indices are being introduced
Until now, IPM performance was largely assessed against the average return of pension assets. This approach had a structural flaw: the manager with the largest volume of assets effectively influenced the average return, shaping the benchmark for everyone else.
The new model eliminates this dependency. A composite index becomes an independent benchmark, reflecting market performance rather than the results of other managers.
Put simply, it will now be clear whether an investment manager is keeping pace with the market, outperforming it, or falling behind, instead of merely fitting into an average figure.
Composite benchmarks, explained simply
The Ki composite index represents a reference portfolio made up of several key market indicators:
- Kazakhstan’s equity market,
- government bond indices,
- global equity markets,
- international fixed-income instruments.
Each component is weighted according to the selected investment strategy. The return of this reference portfolio serves as a clear yardstick against which the actual performance of pension assets under management is measured.
This methodology is widely used by major pension funds worldwide and is considered an industry standard.
Where the system stands today
At present, the Unified Accumulative Pension Fund (UAPF) has entrusted pension assets to five investment portfolio managers. As of December 1, 2025, the total volume of assets under their management stood at approximately 107.3 billion tenge.
Most of these funds are invested in bonds and government securities, reflecting a conservative investment strategy focused on capital preservation. While this approach limits risk, it also constrains long-term return potential.
The upcoming reforms aim to expand investment opportunities while keeping risks under control.
Three portfolios, three investment horizons
From 2026, contributors will be offered a choice of three investment portfolios, differentiated by risk level, expected return, and investment horizon.
Ki (12): capital preservation
Available to all contributors, regardless of age.
Minimum return: at least 95% of the composite index’s nominal return over 12 months.
This portfolio emphasizes bonds and stability.
Ki (36): a balanced approach
Designed for contributors retiring in no less than three years.
Minimum return: no less than 90% of the composite index over 36 months.
Equity exposure increases, along with return potential.
Ki (60): long-term growth
For contributors with more than 13 years until retirement.
Minimum return: at least 85% of the composite index over 60 months.
Here, global equities account for 60%, offering higher long-term growth potential alongside greater volatility.
Expanded tools and stronger accountability
From January 2026, the list of financial instruments eligible for investment using pension assets will be expanded, and new risk limits will be introduced. This will allow IPMs greater flexibility in structuring portfolios according to their chosen benchmarks.
One of the most important innovations is the negative return compensation mechanism. If an IPM’s performance falls below the established minimum benchmark, the shortfall must be covered from the manager’s own capital.
In effect, investment risk is no longer shifted onto contributors alone. Poor decisions now carry direct financial consequences for the manager.
What this means for contributors
Taken together, these reforms aim to:
- improve the long-term returns and security of pension assets,
- foster genuine competition among investment managers,
- expand contributors’ choices,
- strengthen trust in the funded pension system.
Transferring part of one’s pension savings into trust management is no longer a purely formal option. It becomes a practical investment decision, with results that can be tracked, compared, and analyzed against the market.
Applications to transfer part of pension savings into IPM management can be submitted via the personal account on www.enpf.kz, through the UAPF mobile app, or in person at UAPF offices.
Ultimately, Kazakhstan’s pension system is moving away from formal oversight toward internationally recognized, results-based asset management. It is a long-term transition, but one that has the potential to turn pension savings into a more active and efficient component of the national economy.
