Pension Reform Bill Likely to be Approved by Mazhilis

A bill to reform Kazakhstan’s pension system that takes into consideration the years a pensioner has worked is expected to be approved by year’s end, Deputy Minister of Health and Social Development Svetlana Zhakupova said in a Central Communications Service press conference on March 3.

mazhilis

“The bill has already been drafted and is under consideration by the government. In April, we plan to take it to the Mazhilis (lower house of Parliament). Consequently, after it is considered by members, it can be adopted by the end of this year,” Zhakupova said.

The deputy minister stressed that the document regulates the complete transformation of basic pension payments, which today does not take into account a pensioner’s work experience and is given without regard to their current income and wages.

“Starting July 1, 2017, basic pension payments will be given depending on the length of the prior employment’s insurance, which is calculated by participation in the pension system and transferring pension contributions. If a person has worked 10 years or less, they will be given a basic pension of 50 percent of the subsistence minimum. For each year over 10 ten years of experience, they will be given an additional 2 percent. Accordingly, if the length of their work experience is equal to 20 years, the base payment will be 70 percent of the subsistence minimum. The most, or the equivalent of the minimum wage, will be given to pensioners who have 35 or more years work experience,” Zhakupova explained.

The bill also takes into account a conditional savings system in which employers make mandatory contributions of 5 percent of employee salaries.

“Employers will transfer 5 percent of the payroll for each employee starting from Jan. 1, 2018. These contributions will be accumulated in a Unified Accumulative Pension Fund. They cannot be inherited and will be distributed among the participants of the pension system. Five years after the introduction of the conditional saving system, payments will begin on Jan. 1, 2023,” she said.

At the end of the briefing, Zhakupova informed that in 2015, a onetime financial assistance payment will be given to veterans and those disabled during WWII, persons related to them, home front workers and other Kazakhstan citizens who contributed to victory in the war. For this purpose the state set aside a budget of 5.69 billion tenge (US$30.67 million).

The scheme provides for the following pay-outs of one-time financial assistance: 100,000 tenge (US$539) for veterans and those disabled during WWII; 70,000 tenge (US$377.32) to persons related to the veterans and those disabled during WWII and those who contributed to the victory in the war; 30,000 tenge (US$161.71) to parents, spouses of soldiers killed during the Second World War, the residents of besieged Leningrad and underage prisoners of fascist concentration camps, ghettos and other places of detention; 25,000 tenge (US$134.76) to home front workers and the wives of deceased disabled persons during WWII and persons related to them.

Get The Astana Times stories sent directly to you! Sign up via the website or subscribe to our Twitter and Telegram!