How does the Agreement on Pension Provision for Workers of the EAEU countries work?

On January 1, 2021, the Agreement on Pension Provision for Workers of the member States of the Eurasian Economic Union of 20.12.2019 entered into force. (hereinafter referred to as the Agreement). Recall that the main purpose of the Agreement is to form the pension rights of workers of the EAEU member States on the same terms and in the same manner as citizens of the state of employment. This means that each EAEU member State must guarantee the citizens of other EAEU Member States the amount of pension rights equal to the amount of rights granted to its citizens under similar conditions.

Thus, according to article 12 of the Agreement, which contains transitional provisions, it is provided that the appointment and payment of pensions are carried out in the following order:

for the work experience acquired after the entry into force of the Agreement, the pension is assigned and paid by the EAEU Member State in whose territory the relevant work experience was acquired;

for the work experience acquired before the entry into force of the Agreement, the pension is assigned and paid in accordance with the legislation of the EAEU member States and the Agreement on Guarantees of the Rights of Citizens of the Commonwealth of Independent States in the Field of Pension Provision of March 13, 1992, and for the Republic of Belarus and the Russian Federation-the Agreement between the Russian Federation and the Republic of Belarus on Cooperation in the field of Social Security of January 24, 2006.

For example, now in Kazakhstan, the employer must necessarily calculate and deduct monthly from the income of a citizen of the EAEU country (Armenia, Belarus, Kyrgyzstan, Russia), temporarily engaged in labor activity at a Kazakh enterprise for the period of conclusion of an employment or civil law contract, mandatory pension contributions and mandatory professional pension contributions, and transfer them to the Unified Accumulative Pension Fund (UAPF) in the manner and under the conditions established by the pension legislation of Kazakhstan. It should be noted that the competent authority for the implementation of the Agreement in Kazakhstan is the UAPF.

This will allow in the future to ensure the worker's right to receive pension payments from the SAPF due to the accumulated pension savings when they reach the retirement age under Kazakhstani law, or disability groups 1 and 2, if the disability is established in perpetuity.

In accordance with the provisions of the Agreement, if the experience of the worker acquired in the territory of one member state, would not be sufficient for the emergence of the right to benefits (except pension), it will take into account the experience gained in other countries of the EAEU, including the Agreement enters into force, except when such work experience at the same time. For this purpose, the competent authorities of the EAEU countries will exchange information on the employee's work experience through the relevant information forms developed by the authorized and competent authorities of the EAEU countries together with the EEC.

In addition, in accordance with the provisions of the Agreement for the appointment of pension payments for disability medical examination of the worker for disability will be conducted according to the legislation of the country of residence and inspection to determine the group and the period of disability under the laws of the country of employment that assigns a disability pension.

Taking into account that each member state of the EAEU will pay the employee a part of the pension that is adequate for the period of work and deductions of pension contributions in the country of employment, it is necessary that workers-citizens of the EAEU countries formalize labor relations with employers in the EAEU Member states, including in Kazakhstan, that is, they must conclude labor or civil contracts in a timely manner.

The full text of the Agreement on the Pension Provision of Workers of the member States of the Eurasian Economic Union can be found here.

UAPF was established on August 22, 2013 on the basis of JSC "NPF "GNPF". The founder and shareholder of the UAPF is the Government of the Republic of Kazakhstan represented by the State Property and Privatization Committee of the Ministry of Finance of the Republic of Kazakhstan. The National Bank of the Republic of Kazakhstan is responsible for the trust management of the pension assets of the UAPF. Since January 1, 2016, the functions of developing proposals for improving the efficiency of pension asset management have been transferred to the National Fund Management Council. In accordance with the pension legislation, the UAPF attracts mandatory pension contributions, mandatory professional pension contributions, voluntary pension contributions, pension payments, individual accounting of pension savings and payments, and provides the depositor (recipient) with information about the state of his pension savings (more on www.enpf.kz).