Economist sees end of pension guarantees as logical step
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Economist Aydarkhan Kusainov said the proposed removal of state guarantees for pension savings against inflation is a logical step in dismantling the funded pension system. He argued that the move shifts investment risks to savers and reflects a new paradigm of self-reliance, following earlier reforms like early withdrawals.
The Reform Context
Kusainov, a Kazakh economist, commented on the initiative to abolish state guarantees that currently compensate pension savers if the Unified Accumulative Pension Fund's (UAPF) investment return falls below inflation. Under current law, the government covers the shortfall from the republican budget. The proposed change would eliminate this subsidy, transferring investment risk entirely to contributors and asset managers.
Ideological Shift
Kusainov described the move as a 'very wise' decision, arguing that many citizens misunderstand the concept of a social state. 'Sociality does not mean spending money on the population, but teaching it to rely only on itself,' he stated. He framed the reform as part of a broader ideological shift where citizens are expected to prioritize contributions to state GDP growth over personal pension security.
Sequential Dismantling
The economist noted that the guarantee removal follows the earlier allowance of early pension withdrawals, which he called the first step in 'consistently destroying the funded pension system.' He characterized the current legislative initiatives as a logical continuation of this process, reinforcing a new principle: 'Don't think about your personal pension and well-being tomorrow — think about what you can do for the state and GDP growth today.'
What's Next
The government is expected to finalize the legislative changes in the coming months, potentially altering the Pension Law. It remains unclear whether the reform will face public backlash or legal challenges, as it fundamentally redefines the state's role in retirement security.
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Economist sees end of pension guarantees as logical step
