Retirement provision sector in the Kyrgyz Republic: funded system in action

PRLog (Press Release) - Jun 01, 2009 -
A new financial institution – a non-state pension fund (NSPF) “Zhany Asia” – complemented the retirement provision sector of the Kyrgyz Republic.  On May 26 the fund obtained its operating license. The Fund focuses on accumulating pension contributions, allocating them to reliable assets in accordance with the Kyrgyz legislation and paying out the returns on investment to the participants.
Advancement of non-state pension funds corresponds with two priorities of republic’s development outlined by the President of the Kyrgyz Republic. These are: increasing the inflow of “long money” to domestic investment projects and adding to social stability.
- Non-state pension funds represent a response to current Kyrgyz economic realia, - states Bakytbek Satybekov, CEO of NSPF “Zhany Asia”. – A great part of our citizens, such as private entrepreneurs, migrant workers, employees that are paid “under the table”, are completely excluded from the state retirement provision system. Additionally, the system itself operates under the principles of equal distribution, where the pension sums do not correspond with the actual amount contributed to the fund by the workforce.
Like the participants of any NSPF, the contributors of NSPF “Zhany Asia” have a set of advantages. First of all, the amount of retirement savings depends directly on the participant; the more funds are allocated to the pension fund, the higher are the sums paid out to the individual upon retirement. Second of all, this scheme allows to preserve and grow contributors’ retirement savings as a result of monthly capitalization of investment income. Thirdly, the participant is entitled to roll over his/her savings from one fund to another, cash in on the fundwhen moving to another country, as well as receive all his/her funds in 3 year’s time with accrued investment income.  
NSPF “Zhany Asia” investment policy is implemented in compliance with legislation of the Kyrgyz Republic. It is characterized by its conservative nature; retirement contributions are invested only in reliable securities including non-state securities, which, in turn, ensures an inflow of domestic investments into the Kyrgyz economy.