Pensions in Kazakhstan: assignment mechanisms

In our Republic, pension payments are provided at the expense of pension contributions made by employers or by depositors on a voluntary basis. The pension received by every citizen of the country consists of a basic pension guaranteed by the State to each citizen and pension contributions (or voluntary contributions), as well as various extra charges, for example, for persons who worked in hazardous or dangerous industries or who lived in places of ecological disaster and much more. Citizens of the Republic of Kazakhstan, foreigners and stateless persons permanently residing in the territory of the Republic of Kazakhstan can get a pension.

Basic pension

The basic pension is received by citizens at a pension age (men - 63 years, women - 58 years/63 years) in 2017 the same size 14 466 tenge.

However, according to the Ministry, within the framework of the implementation of the Address, the method of its appointment will change from July 1, 2018. It will be appointed depending on the length of participation in the pension system.

The new mechanism for assigning the basic pension is that if a citizen worked and made contributions to the UNPF for only 10 years or did not work at all, then the basic pension is set at 54% of the subsistence level, which is equivalent to the current size of the basic pension. In this case, the person will not get any extra charge.

For each year, worked over 10 years, the basic pension will increase by 2%. For example, the experience of 20 years - the basic pension 74% of the living wage, worked 30 years - the basic pension - 94% of the living wage. At the same time, the law established that with an employment of 33 years or more, the amount of the basic pension will be 100% of the living wage.

At the same time, the length of participation in the pension system will include: the length of service worked out in the solidarity system (as of January 1, 1998), the accumulative experience (the periods for which pension contributions were paid (the actual record of pension contributions) and other socially significant periods care for a child under 3 years old, disabled from childhood till 16 years, the residence time of spouses of military personnel, employees of special agencies, diplomatic workers, etc.).

The Ministry of Labor and Social Protection of Population of Kazakhstan assures that the new method of assigning the basic pension corresponds to the principle of social justice, since it will not only improve the financial situation of pensioners, but will also serve to strengthen labor motivation and formalization of labor relations of citizens. That is, the longer a person works, the more he has a pension (both accumulative and basic).

This innovation will be extended to both future and existing pensioners, whose basic pensions will be recalculated from as of July 1, 2018. It is expected that as a result of the recalculation the base pension at the rate of 100% of the living wage will be in 44.1% of pensioners, from 74 to 100% of the living wage - in 44.5% of pensioners.

Solidarity pension

The size of a solidarity pension, depends on the length of service and pre-retirement income. To maintain the size of solidarity pensions at an acceptable level, their amounts are indexed annually, two percent ahead of the inflation rate.

Thus, since January 1 of the current year, the sizes of solidarity pensions have been raised again by 9%. In addition, in order to implement President's Address from July 1, 2017, the pension was increased by an additional 11%. As a result, the average pension on September 1, 2017 reached 66,051 tenge (taking into account the basic pension payment). At the moment, the number of recipients of pension payments was 2,104.2 thousand people.

Pension payments from the UNPF

Pension payments from the Unified National Pension Fund by the formed mandatory pension contributions. The size of the pension depends on the amount of pension savings and is calculated individually.

Thus, working citizens will receive 3 types of pensions (basic, solidarity, funded), and the unemployed population - only a basic pension of 54% of the subsistence minimum (in 2017 - 14,466 tenge).

Kairat Zhandybayev