Leading insurance company Allianz^[1] released a new edition of its Global Pensions Report, which analyzed the pension systems of 71 countries using its Allianz Pension Index (Index). There, Kazakhstan ranked 26th ahead of Austria, Spain, Chile, Singapore, Hong Kong, China and many other countries (in 2023, Kazakhstan would have taken 34th place out of 75 countries in the Index).

Allianz Pension Index (API) is based on a comprehensive assessment of the stability and integrity of pension systems. It consists of three sub-indices and 40 different dimensions rated on a scale from 1 to 7, where 1 represents the best result. The API index of the pension system of Kazakhstan is 3.5 points.

According to the first sub-index, which evaluates the rate of demographic changes, public debt and the general standard of living, the score of Kazakhstan reached 4.1 points (in 2023 - 3.5 points). This indicator is higher in the UAE (2.3 points), Australia (2.6 points) and Israel (2.9 points).

On the second sub-index, which assesses the stability of the pension system, Kazakhstan scored 3.6 points (in 2023 - 3.6 points). The best results in this sub-index were achieved by Indonesia, Denmark and Bulgaria (with points from 2.1 to 2.3), mainly by increasing the retirement age and introducing a fund component into their pension systems.

According to the third sub-index, which assesses how well the pension system can provide a decent (adequate) level of living in old age, the Kazakhstani pension system has 3.2 points (in 2023 - 3.3 points). Denmark, the Netherlands and New Zealand are the leaders of this rating (scores from 1.7 to 2.0), which have strong fund components of the second and third levels of the pension system.

According to the report, the average score for all analyzed pension systems was 3.7. Denmark is the country with the best pension system according to Allianz. This country took the lead in 2023 as well, with 2.3 points. The Netherlands and Sweden are in the second and third place (2.6 points), and Japan, which has 2.7 points, is in fourth place, displacing New Zealand. New Zealand scored 2.8 points, Israel - 3, Australia, Great Britain, Norway and the USA - 3.2 points.

The lowest places in the rating are taken by the pension systems of Morocco, India, Laos, Malaysia, Sri Lanka (from 4.5 to 5 points). In these countries, the problem of covering the population with a pension system is very acute, because informal employment prevails.

The report pays special attention to the problem of aging of the population. According to the latest forecasts of the UN, the number of people aged 65 and over will almost double over the next 25 years, from the current 857 million to 1,578 million in 2050. Declining birth rates will slow the growth of the working-age population, and by mid-century there will be 26 people over 65 for every 100 people aged 15 to 64. Currently, this number is equal to 16 people. The birth rate in the analyzed 71 countries, comprising 75% of the entire globe, varies from 0.7 children per woman in Hong Kong to 4.4 children in Nigeria. These countries can also specify upper and lower limits of life expectancy. Hong Kong has an average of 85.6 years, while Nigeria has an average of 54.6 years. Demographic burden ratio (DBR), which refers to the number of people of retirement age per 100 people of working age, varies from country to country. While the overall level of CVD is a cause for concern in most industrialized countries, the rapid aging rate in many developing countries is a cause for concern. The countries with the fastest aging rates are Hong Kong, South Korea, Taiwan and Saudi Arabia. However, in 2050, the world's 20 "oldest" countries will consist mainly of EU member states: Italy, Spain, Greece and Portugal will have more than 60% of the population. The birth rate in Nigeria, Kenya and Pakistan is still high, and due to the relatively low life expectancy, the population is among the youngest countries.

Allianz experts pointed out that one way to reduce the negative impact of demographic changes on the pension system is to supplement the public pension system with an accumulation component. it is noted that it is to ensure the standard of living. Therefore, when reforming or creating pension systems, policymakers must consider not only their long-term sustainability, but also their merits. If the state pension systems cannot provide a decent standard of living in old age, then the taxation plan should consider additional benefits and state-subsidized pension products, professional and personal pension plans should be available. In these countries, supplementary occupational savings programs and private pensions are already a key element of pension systems.

The adequacy of pension systems is also determined by the income replacement ratio (IRC). The average total KAC in the state pension systems of the analyzed countries is equal to 53%. Meanwhile, the ratios vary from 8% in South Africa to 88% in Brazil. According to the results of 2024, KAC in Kazakhstan showed 41%. However, the International Labor Organization (ILO) noted that due to pension reforms, the level of pension payments in some European countries is at risk of falling below the recommended minimum level of 40-45% of income after 30 years of contributions. This confirms the urgent need to strengthen additional accumulation levels of pension systems.

The Allianz report asks whether public pension systems can cope with demographic challenges in the face of declining birth rates and increased life expectancy. As a result of a comprehensive analysis of the pension systems of different countries, it was concluded that the systems financed by the "pay-as-you-go" (distribution systems) principle, in which the contributions of the working population are used to finance the pensions of current retirees, cannot guarantee long-term financial stability and a good standard of living that can provide adequate pension payments in old age. finding a balance between In addition, allowing older workers to continue working is also important for maintaining the balance of public pension systems.

Thus, the report concludes that the "perfect" pension system is the right balance between a public pension system (pay-as-you-go) and an accrual pension system. Countries that combine these two components will be better prepared for demographic changes and to ensure the long-term stability of the pension system and the adequacy of pension payments. However, an efficient labor market is a necessary condition for the successful implementation of any pension reform, which means an increase in the share of formal employment in developing markets and adaptation of labor markets to the needs of an aging workforce in industrialized countries.

Information on the Allianz Global Pension Report "Time to Move" and the Allianz report on the results of the analysis of the world's pension systems in 2025 are available at this link:

https://www.enpf.kz/kz/indicators/obzory-mezhdunarodnykh-ekspertov/mezhdunarodnye-reitingi/

[1] Allianz Group is a world leader among insurance companies and asset managers serving 125 million individuals and corporate clients in about 70 countries. As part of its activities, Allianz offers a wide range of personal and corporate insurance services, including property, life and health insurance, assistance services, credit insurance and international business insurance. In addition, the company is actively engaged in research in various areas of the economy, including reports on the analysis of world pension systems.

Source : https://www.gov.kz/memleket/entities/enbek-pavlodar/press/news/details/1017953?lang=kk