Trust - A New institution

The KPST is staffed by 24 professionals whose function is to receive and process contributions from participants and employers, and to provide advice and support to both employers and employees.

KPST is based in Prishtina and has five major departments: Employer Relations, Employee Relations, Accounts Management, Public Relations and Training, and Information Technology. The institutional structure has been designed to efficiently manage personal accounts, keep records of the contributions, provide a wide spectrum of client services, and keep the public informed on the various aspects of implementation of the new pension program.

Collection Process

Employers make payments on behalf of all their employees monthly through the network of commercial banks in Kosovo. Together with payments, employers submit payment forms.

After payment is made, commercial banks send the money to the account of the KPST at the BPK (Banking and Payment Authority). Payment forms are forwarded to Tax Administration. Tax Administration collects and processes the forms, monitors compliance, reconciles payments, and forwards this information to the KPST.

At the instruction of the KPST, all new contributions are regularly transferred from the BPK account to the account of the an asset management firm, whose responsibility is to invest the money. Money invested with the asset managers is expected to grow in value and that investment gain will be proportionally allocated to the individual accounts of members, after deduction of a fee to cover administrative expenditures.

Main Investment Principles

Defining investment policies is a major responsibility of the Governing Board. In formulating investment policy, the KPST trustees focus on a single objective: the members’ benefit. It is their responsibility to minimize risks that might adversely affect savings of currently employed Kosovars. Independence of the Trust is key to the success of its functioning and investments. Decisions on investments must be isolated from any political influences and be made only on the basis of financial prudence. This is why the KPST is established as an independent institution.

The Regulation sets explicit criteria for investments. The main goals of prudent investment of KPST pension assets are:

• security of pension assets, which means that assets will have to be invested in a secure and safe manner;
• diversity of investment, which means that investments will be made in various financial instruments;
• maximum return, consistent with security of Pension Assets;
• maintenance of adequate liquidity, which means that assets should be invested in easy-to-sell financial instruments, which will enable the assets to become cash quickly if necessary.

The Trust must invest its money in financial instruments that have a recognized value and can be bought and sold. The Trust cannot invest directly in factories, equipment, or real estate. The Governing Board conducted an international tender to select asset managers.