Kazakhstan pension savings lose inflation guarantee, raising risks
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Kazakhstan has scrapped the state guarantee that pension savings would keep pace with inflation, a move that shifts investment risk onto individual savers. The change, effective from July 2026, exposes the 18 trillion tenge ($38 billion) pension fund to market volatility. Analysts warn that without the guarantee, real returns could turn negative in years of high inflation.
The Guarantee Removal
The government eliminated the inflation guarantee for the Unified Accumulative Pension Fund (UAPF) as part of broader fiscal reforms. Previously, the state ensured that pension savings grew at least at the official inflation rate. The UAPF, holding 18 trillion tenge, now operates without a safety net, exposing contributors to market downturns.
Market and Saver Impact
Forbes Kazakhstan notes that the change primarily affects 11 million contributors, many of whom have limited financial literacy. In 2025, inflation stood at 8.5%, while the UAPF's nominal return was 9.2%, leaving a thin real return of 0.7%. Without the guarantee, a repeat of 2022's 20% inflation could erode savings significantly. The move aligns with Kazakhstan's push to develop capital markets, as the UAPF is a major investor in government bonds and corporate securities.
What's Next
The National Bank is expected to announce new investment guidelines for the UAPF by September 2026. It remains unclear whether the government will introduce alternative protections, such as a minimum return floor, or fully liberalize pension fund management.
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Kazakhstan pension savings lose inflation guarantee, raising risks