Performance of Pension Funds

Abstract

After ten years of collecting and investing 10% of the economy’s wage income, Kazakhstani pension funds managed to accumulate an equivalent of 10% of GDP. This is second only to commercial banks, whose assets amounted to 90% of GDP by the end of 2007. However, if looked at as a source of old-age income, pension asset accumulations on their own have been insufficient. The chapter attempts to find explanations of why pension fund returns were underwhelming. The three 10s were produced by a combination of poor investment returns, pervasive tax evasion, and high wage growth. This chapter focuses on the first - investment returns.