Publication date: 10.10.2023 00:00
On 1 July 2023, the Social Code of the Republic of Kazakhstan came into force, some of the provisions of which regulate the introduction of mandatory employer pension contributions ("MEPC").
As of 1 January 2024, the mandatory employer's own funds will be required to pay the EIOP only for employees born after 1 January 1975. The amount of MEPC is calculated on the monthly income of each employee:
- from 1 January 2024 - 1.5%;
- from 1 January 2025 - 2.5%;
- from 1 January 2026 - 3.5%;
- from 1 January 2027 - 4.5%;
- from 1 January 2028 - 5.0%.
The monthly income of an employee, which is taken for the purpose of calculating the MEPC, must not be less than the minimum wage and must not exceed 50 times the minimum wage established for the relevant financial year by the law on the republican budget.
It should be noted that, in contrast to the individual funded pension system, pension savings at the expense of the MEPC are conditionally funded, so they are not the property of the employee, are not inherited, cannot be transferred at the choice of the depositor to a management company for trust investment management and/or to an insurance organization for the purchase of a pension annuity, and they are not subject to the state guarantee of safety of pension savings.
