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The purpose of modernization of the pension system in Kazakhstan is to improve the quality of life of the population

basic pension

In accordance with the Concept of Social Development of the Republic of Kazakhstan until 2030, citizens at every stage of their lives are guaranteed the minimum required level of social services - the minimum social standards that lay equal starting opportunities for the self-realization of a person.

As for the pension, on the recommendation of the International Labor Organization, its size should be 40 percent of the total previous income.

In this regard, the main task of pension provision is to ensure the replacement rate of income by a pension not lower than the international standard.

As is known, the pension in Kazakhstan consists of three parts: solidarity, accumulative and basic.

To prevent a reduction in the replacement rate of income by a pension, the pension system is being modernized.

The concept of further modernization of the pension system of the Republic of Kazakhstan until 2030 provides for the development and improvement of the pension system in all its components:

firstly, the size of solidarity pensions is guaranteed to increase annually with the inflation rate 2% ahead of the inflation rate;

In 2017, the size of pension payments, including basic payments, was increased twice. Since January 1, 2017, all pension payments for age and seniority have been increased by 9%, basic pension by 7%.

In pursuance of the mandate given in the Address to the People of Kazakhstan of January 31, 2017, "The Third Modernization of Kazakhstan: Global Competitiveness," since July 1, 2017, the size of solidarity pension payments has been increased by an additional 11%, the state basic pension benefit by 13%.

This ensured the growth of pensions to 20% to the level of 2016.

Since January 1, 2018, the size of solidarity pensions has been increased by another 8%, the basic pension by 6%.

As of September 1 of the current year, the average pension amount is 81 174 KZT or 226 US dollars, for comparison in Russia the average pension according to the Federal State Statistics Service is 13 323.1 rubles or 200 US dollars, and in Belarus according to the Ministry of Labor 374, 76 rubles or 181 US dollars.

In terms of the minimum pension, Kazakhstan is also ahead of its neighbors, as of October 1 this year its size is 49,019 KZT or 137 dollars, in Russia - 4,983 rubles or 75 dollars, and in Belarus - 207 rubles or 100 dollars US.

Secondly, the accumulative pension system is developing and improving;

So, from 2020, it will be introduced its conditional-funded component, providing for the transfer of mandatory pension contributions at a rate of 5% of the wage fund at the expense of employers in favor of employees.

The right to pension payments from the mandatory pension contributions of the employer will be granted to persons who have reached the retirement age, as well as the disabled of Groups I and II (whose disability is fixed for unlimited period), with a mandatory participation period of not less than 60 months in the conditional savings system. The size of pension payments from the contingent-funded component will be determined based on the pension obligations formed on the conditional pension account and the expected life expectancy. It is important to note that these payments will be carried out for life.

Thirdly, the basic pension provision is being improved.

The Head of State, in his message of January 10, 2018, "New Opportunities for Development in the Context of the Fourth Industrial Revolution," noted that the base pension will increase on average 1,8 times on July 1, 2018, depending on the length of service.

So, since July of this year, the procedure for assigning a basic pension has changed, which from that date is assigned depending on the length of participation in the pension system and ranges from 54% (15,274 KZT) to 100% (28,214 KZT) of the subsistence minimum.

Persons who have 10 or less years of experience in the pension system receive a basic pension at a minimum level of 54% of the subsistence minimum or in the current year KZT 15,274.

For every year over 10 years, the size of the basic pension increases by 2% and with experience of 33 or more years, its size is 100% of the subsistence minimum or 28 284 KZT.

At the same time, all pensioners who were held made a one-off recalculation of the basic pension, according to which the average size of the basic pension was KZT 25,664 or 91% of the subsistence minimum, which ensured the growth of the basic pension by 1.8 times in comparison with 2017.

With the introduction of this methodology, the entire pension system of Kazakhstan is completely tied to the length of service.

Thus, the social policy pursued by the state is aimed at a gradual improvement of the quality of life of the population and, despite the difficult economic conditions, the Government fully fulfills all the social obligations assumed.

Changed on 22 September, 2018 - 15:41
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