Doing Business: Pension System in Kazakhstan

Pension System in Kazakhstan

The pension system of Kazakhstan is regulated by the Pension Provision Act of the Republic of Kazakhstan. According to this legislative act, starting from 1998 all employed citizens are obliged to allocate 10% of their total income to an individual retirement account into a single pension fund (SPF). At the same time, citizens have the right to make voluntary pension contributions. The accumulated funds are invested in the economy and after the ending of employment a personal pension is paid back in equal sums every month.

The trust management of pension assets is carried out by the National Bank of Kazakhstan. Single pension fund is entitled to receive a commission for their activity.

The retirement age in Kazakhstan is 58 for women (with further increase to 63 years from 2018 to 2027) and 63 for men. However, it can be reduced for certain categories of workers (e.g., for citizens living in the areas of emergency and maximum radiation risk in a certain period of time; for women with five or more children who have reached the age of 8, the military servants). From this age the citizens start receiving their pension payments from the single pension fund. The employer in this case stops transferring 10% from the total incomes of the employees. 

Besides that, the employer is required to allocate 5% of his own resources as obligatory professional pension contributions to the employees engaged in the jobs with harmful (especially harmful) work conditions. 
Today a single pension fund is operating on the territory of Republic of Republic. As of January 1 of 2016, the total amount of SPF’s savings was accounted to 5.8 trillion tenge, which is approximately 17 billion US dollars.

Foreign employees working under work permit do not make contributions to SPF

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