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Parliament adopted the Law on the issues of pension provision

Today at the plenary meeting of Senate of Parliament of the RK the deputies have adopted the Law "On amendments and additions to some legislative acts of the Republic of Kazakhstan on issues of pension provision".

This Law is developed with the purpose to implement main directions of Concept on further modernization of pension system of the RK till 2030 approved by Decree of the Head of State dated June 18, 2014.

The Law stipulates:

1. Change of the procedure for assignment of the base pension payment.

It is proposed, starting from July 1, 2017, to assign pension payment depending on the length of participation in pension system at reaching the retirement age. At length of participation being 10 and less years the amount of pension payment will be equal to 50% of the minimum subsistence level with its increasing per each year over 10 years by 2% of minimum subsistence but not more than minimum subsistence level at 35-year length of participation.

2. Introduction of new conditionally funded components of the pension system at the expense of establishing additional 5% of mandatory pension contributions by an emplоyer (hereinafter - MPC).

These contributions are the property of citizens and will be fixed on the conditional pension account of each employee opened in IAPF.

The right for pension payments at the expense of MPC by an employer will be exercised by the persons who reach the retirement age and for whose name the conditional pension account is opened provided that the MPC transfers were made not less than for 60 months and also persons with I and II group disablement which is established without limit in time.

Pension is paid for the term of life by monthly payments and is not transferred by succession. Annually the pension amounts will be indexed depending on the financial abilities of IAPF and demographic indices.

3. Improvement of pension provision of certain categories of citizens.

It is proposed, starting from January 1, 2016, to execute transfer of all law enforcement officials to full state provision.

The proposed measures will make it possible to ensure and preserve in future the ratio of cumulative pension to average monthly salary in all sectors of economy (replacement rate) at the level recommended by International Labor Organization (not less than 40%).

Changed on 9 July, 2015 - 11:50
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