1. Good afternoon, I read that from July 1, 2023, seniority pensioners will be able to use pension savings to purchase housing or treatment. Please explain who belongs to the category of such pensioners and where you can apply for benefits?
We clarify that, according to the norms of the Social Code of the Republic of Kazakhstan, which will enter into force on July 1, 2023, recipients of pension benefits for long service have the right to use pension savings formed from compulsory pension contributions to improve housing conditions and (or) pay for medical treatment for themselves or their spouse (spouse) or close relatives.
This right can be used by military personnel, employees of special state and law enforcement agencies, state courier service, as well as persons whose rights to have special ranks, class ranks and wear uniforms have been abolished since January 1, 2012, and persons whose medical positions have been reduced in internal affairs of the Republic of Kazakhstan from July 1, 2022 and January 1, 2023, who at the time of the reduction of their positions had at least twelve years of service and six months of continuous military service, service in special state and law enforcement agencies, state courier service, subject to their continued work in medical organizations located in pre-trial detention centers and institutions of the penitentiary (penal) system.
At the same time, the amount of a lump-sum pension benefit payment at the expense of compulsory pension contributions cannot exceed the amount of pension savings at the expense of compulsory pension contributions of the recipient of pension benefits for long service, which are in trust management of the National Bank of the Republic of Kazakhstan.
Pension savings from compulsory occupational pension contributions (if any) will be available to recipients of pension benefits for long service when they reach the generally established retirement age.
The remaining pensioners retain the right to use up to 50% of their savings formed from compulsory pension contributions for the above purposes, if the amount of their pension provides an average monthly income replacement rate of at least 40%.
Seniority pensioners can apply on the website www.enpf-otbasy.kz for lump-sum pension payments to Otbasy Bank Housing Construction Savings Bank JSC or second-tier banks to use the accumulated funds to improve housing conditions.
To use lump-sum pension benefits for medical treatment, you can only apply to Otbasy Bank Housing Construction Savings Bank JSC.
2. Hello! I heard that compulsory pension contributions from employers are being introduced, however, as I know, an additional 5% is already paid for workers in certain professions. Tell us more about it.
To date, the compulsory occupational pension contributions (COPC) that you mentioned are transferred by the employer at their own expense to the UAPF in favor of their employees employed in jobs with harmful working conditions, whose professions are provided for by the list of industries, jobs, occupations of workers developed by the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan and approved by the Government of the Republic of Kazakhstan - until 01.07.2023, and from 01.07.2023 - by the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan. The COPC is 5% of the employee's monthly income.
COPC are paid in national currency no later than the 25th day of the month following the month of payment of income, unless the employer is an individual entrepreneur applying a special tax regime based on a patent, in the manner and within the time limits provided for by the tax legislation of the Republic of Kazakhstan. The transfer of COPC is controlled by the state revenue authorities. If the employer does not timely transfer funds to the UAPF to the individual pension saving account of the employee, subject to the actual payment and receipt of income by the employee, the state revenue authorities collect from the employer the funds to be transferred to the account in the UAPF, with an accrued penalty in the amount of 1.25 times the base rate of the National Bank of the Republic of Kazakhstan, for each day of delay (including the day of payment to the State Corporation).
Also, in accordance with the norms of the Social Code of the Republic of Kazakhstan, from January 1, 2024, the employer’s compulsory pension contributions (ECPC) will be attracted. They will be carried out only for employees born after January 1, 1975, at the expense of the agent's own funds and are set depending on the employee's monthly income. The ECPC rate from January 1, 2024 will be 1.5% of the employee's salary and will increase annually by 1% - up to 5% in 2028. This phased introduction of the ECPC will ease the burden on the employer.
The right to pension benefits at the expense of ECPC can be used by persons who have reached retirement age, as well as those with disabilities of the first and second groups, if the disability is established indefinitely, with at least 5 years (60 months) of participation in the ECPC system.
The maximum amount of pension benefit at the expense of ECPC cannot exceed two times the subsistence minimum established for the corresponding financial year by the law on the republican budget.
Pension benefits at the expense of ECPC are assigned for life, paid for the current month and are made up to the month of death or departure for permanent residence outside of Kazakhstan, inclusive.
Please note that, unlike the accumulative pension system, pension savings from ECPC in the notional funded component are not inherited, since they are not the property of the employee, they are not subject to withdrawal from the UAPF in the form of lump-sum pension benefits in order to improve housing conditions and (or) pay medical treatment from the UAPF, cannot be transferred to the trust management of the IPM, and they are not covered by the state guarantee of the safety of pension savings.
3. Good afternoon, I have decided to transfer part of my pension savings to a private investment portfolio manager. I heard about the new rules in connection with the adopted Social Code. How much savings can I transfer under the new rules?
According to the adopted Social Code of the Republic of Kazakhstan, from July 1, 2023, persons who have pension savings in the UAPF formed at the expense of:
1) compulsory pension contributions and (or) compulsory occupational pension contributions, will be able to transfer:
• within 50% of the amount of their pension savings on individual pension saving accounts (IPSA) to the investment portfolio manager (IPM) on the date of receipt of the application of this person to select (change) IPM;
• within the limits of the balance on IPSA in case of a concluded pension annuity agreement with an insurance company;
2) voluntary pension contributions (VPC), can transfer all their savings to IPM.
Before transferring part of them to IPM trust management, it is recommended to familiarize yourself with the current list of IPM on the market, study their investment declarations on the UAPF website, investment activity reviews, and learn more about the experience and results of the selected private company. You can get acquainted with information about them and study their investment declarations on the website www.enpf.kz in the "Services" section - "Register of Investment Portfolio Managers". Detailed statistics on the transfer of pension savings at the expense of CPC and (or) COPC to trust management is also available on the website www.enpf.kz in the section "Indicators" - "Transfer of pension savings to management companies".
Also note that pension savings can be transferred from one IPM to another no more than once a year. If you decide to return the savings under the management of the National Bank of the Republic of Kazakhstan (NBRK), then this can be done from 01.07.2023. 1 year from the date of transfer of pension savings to IPM trust management.
At the same time, if pension savings were transferred several times to trust management of the same IPM in accordance with the application for the choice of IPM, then the return of pension savings to NBRK trust management is carried out no earlier than one year from the date of initial transfer of pension savings to trust management.
4. Hello, I provide the services of a company designer under a civil law agreement. Should I or the company transfer pension contributions to the UAPF?
When an individual concludes a civil law contract with an organization for the provision of services, the organization is responsible for the correct calculation, withholding and timely payment of taxes and pension contributions for an individual. The transfer of compulsory pension contributions (CPC) is made by companies through non-cash payments. At the same time, individuals receiving income under civil law agreements, who do not have accounts with banks and organizations engaged in certain types of banking operations, deposit CPC in cash to second-tier banks (STB) for their subsequent transfer to the UAPF, indicating the details of the State Corporation.
It should be noted that an innovation has been introduced within the framework of the Social Code: individuals working under civil law agreements with individuals are now included in the list of persons who are obliged to independently pay OPC to the UAPF by bank transfer or by depositing cash in STB for their subsequent transfer to the UAPF by details of the State Corporation (previously they could make contributions on a voluntary basis).
5. I am a Russian citizen temporarily working in Kazakhstan. Do I have the opportunity to transfer voluntary pension contributions and how can I do this?
Yes, there is such a possibility. According to Article 3 of the Agreement on Pension Provision for Workers of the Member States of the Eurasian Economic Union dated December 20, 2019 (EAEU Agreement), the formation of pension rights of workers-citizens of the EAEU countries takes place at the expense of pension contributions on the same conditions and in the same manner as the formation rights of citizens of the state of employment. This means that each member state of the EAEU guarantees citizens of other member states of the EAEU the scope of rights to pensions equal to the scope of rights granted to its citizens on equal terms.
In accordance with Article 1 of the EAEU Agreement in the Republic of Kazakhstan, pension contributions include, among other things, voluntary pension contributions (VPC) to the UAPF.
Recall that today the basis for opening an individual pension saving account for accounting for VPC is the first VPC received by the UAPF, the size and frequency of which the contributor determines independently.
You can transfer VPC to UAPF through second-tier banks (STB) or Kazpost JSC. Some STBs make it possible to transfer contributions online (in a mobile application or self-service terminals).
More detailed information can be found on the UAPF website (https://www.enpf.kz/ru/services/depositors/ipa/vpc.php ).
