UAPF answers 5 pressing questions (June 2021)
1) Hello! Recently I read the news on one of the portals that it is possible to receive pension benefits from the UAPF at the expense of voluntary pension contributions, even before reaching retirement age. Can you tell us more about what VPC is and how to start receiving benefits before the age of 63?
Voluntary pension contributions (VPC) are money that contributors contribute on their own to the UAPF. They can be made by both individuals in their favor, and individuals and legal entities in favor of a third party. In this case, the amount and frequency of payment of VPC are established by an individual or legal entity independently. Thus, for example, in June you can top up your account by 5 thousand tenge, and in July by 10 thousand tenge, etc. However, in order to receive decent pension benefits in the future, it is necessary to replenish the account regularly.
One of the advantages of paying VPC is that when an individual pays VPC in his favor out of his income, tax legislation provides for a tax deduction for the amount of VPC paid (i.e. paid VPC are not subject to IIT). In addition, from January 1, 2021, VPCs paid by a tax agent (employer) at their own expense in favor of an employee are deducted when calculating corporate income tax. At the same time, the amounts paid by the employer to VPC in favor of the employee are not taken into account when taxing the employee's income.
Note that from May 1 of this year, the basis for opening an individual pension saving account for VPC accounting is, among other things, the first voluntary pension contribution received by the UAPF. Thus, you do not need to visit the office of the Fund, the identification of the individual in whose favor the VPCs are paid is carried out according to the personal data (full name, IIN, date of birth) specified in the electronic format of the payment order when transferring the VPC, and all the necessary information: about the details of a valid identity document of an individual about the place of permanent residence, other information UAPF receives from the relevant information systems of state bodies.
Regarding the age of VPC benefit payments. According to paragraph 1 of Article 33 of the Law of the Republic of Kazakhstan On Pension Provision in the Republic of Kazakhstan, the right to pension benefits from the UAPF at the expense of VPC arises from the following persons who have pension savings:
1) those who have reached the age of fifty;
2) who are disabled;
3) foreigners and stateless persons leaving or leaving for permanent residence outside the Republic of Kazakhstan, who have submitted documents determined by the legislation of the Republic of Kazakhstan, confirming the intention or fact of departure;
4) having pension savings within the amounts of voluntary pension contributions and the investment income accrued on them, which are in the unified accumulative pension fund and (or) a voluntary accumulative pension fund, for at least five years.
Note that subparagraph 4) of paragraph 1 of this article entered into force on May 1, 2021. According to this innovation, VPC benefits can be received by all persons with a VPC in the pension system for at least five years. Thus, starting to save funds at the expense of VPC, for example, at 25 or 35, respectively, at 30 or 40 years old, you can start receiving your first benefits.
Let us remind you that payment of VPC to UAPF can be made through second-tier banks (STB) or Kazpost JSC. Some STBs provide the ability to transfer contributions online (through a mobile application or self-service terminals). In addition, it is possible to submit an application to the employer, on the basis of which the latter will regularly transfer the VPC to the UAPF in favor of the applicant or a third party.
2) Good day! I am a citizen of Uzbekistan, I work in the field of sales. I would like to know if I have the right to participate in the pension system of Kazakhstan and if my employer has to make pension contributions for me?
In accordance with Article 2 of the Law On Pension Provision in the Republic of Kazakhstan, foreigners and stateless persons permanently residing in the territory of the Republic of Kazakhstan have the right to pension provision on an equal basis with citizens of the Republic of Kazakhstan, unless otherwise provided by laws and international treaties. Foreigners and stateless persons permanently residing in the territory of the Republic of Kazakhstan, in the presence of an identity document issued by an authorized body of the Republic of Kazakhstan (for a foreigner, this is a residence permit of a foreigner in the Republic of Kazakhstan, for a stateless person - a certificate of a stateless person) the right to pension benefits in the Republic of Kazakhstan.
If foreigners and stateless persons are in the Republic of Kazakhstan on a different legal basis, then they are considered temporarily staying in the Republic of Kazakhstan and are not entitled to pension benefits in the Republic of Kazakhstan, incl. not entitled to pay pension contributions to the UAPF.
Thus, foreigners and stateless persons permanently residing in the territory of the Republic of Kazakhstan have the right to participate in the accumulative pension system of the Republic of Kazakhstan. As for the submission of an application for opening an individual pension saving account (IPSA) for accounting for compulsory pension contributions (CPC), since January 2019, the opening of IPSA in the UAPF for CPC accounting is carried out automatically, respectively, there is no need for individuals to apply to the UAPF to open it. If an individual does not have an open IPSA for CPC accounting in the UAPF, the account is opened on the basis of the initial CPC amount received from the "Government for Citizens" State Corporation non-profit joint-stock company, transferred by the agent to the UAPF, to the details of the individual specified in the electronic payment order. In this connection, an application for opening IPSA by individuals for accounting CPC in the UAPF is now not required.
3) I have been a pensioner for the second year, but recently I again found a small part-time job. Now I have a question, will my employer transfer 10% of my salary to the UAPF? I'm already getting pension benefits from you.
No, your employer will not transfer compulsory pension contributions to the UAPF for you. In accordance with the provisions of paragraph 2 of Article 24 of the Law of the Republic of Kazakhstan On Pension Provision in the Republic of Kazakhstan, persons who have reached retirement age are exempt from paying compulsory pension contributions and compulsory occupational pension contributions to the UAPF.
4) About five years ago, I opened a pension saving account for myself with the UAPF. It was necessary for my work, but without finishing a week, I left this place. As far as I know, all these years my pension saving account has not been replenished, and now, probably, my account has already been closed? What should I do if I need a pension saving account again, should I go to your office?
If you have a zero account with no pension savings starting from March 1 of the current year, such individual pension saving accounts (IPSA) are closed after 1 (one) month.
Thus, IPSA, which were previously opened, are closed in the UAPF, including in cases when a person, applying for a job, applied for opening an account or entered into a pension agreement, but for some reason did not start making contributions, as well as the closing of IPSA, on which there were pension savings and payments and transfers of the entire amount of pension savings were made and to which, after the payment or transfer, no contributions were received within 1 (one) month.
In the future, to open a new IPSA, you do not need to visit the UAPF service offices. Since 2019, in order to open IPSA in the UAPF for accounting for compulsory pension contributions (CPC), an individual does not need to apply to the UAPF in order to complete an application. If there is no account, then it is opened in the information system of the UAPF automatically upon receipt of the first contribution, the identification of an individual is carried out according to the personal data specified in the electronic format of the payment order when transferring the pension contribution, and all the necessary information about the details of the current document and other details of the UAPF is obtained from information systems of state bodies.
5) Good day! As you know, from the beginning of this year, we, UAPF contributors, can buy real estate at the expense of our pension savings. In my case, “pension” in the amount of 5.5 million tenge should have helped me buy an apartment, but the seller did not wait and managed to sell it to another client. Now my money "hangs" in Otbasy Bank, what will happen to my unused money now? How soon will they return to my UAPF account? And what losses can I expect?
After the receipt of a lump-sum pension payment to a special account in an authorized operator - Otbasy Bank Housing Construction Savings Bank JSC, the recipient within 45 working days (in accordance with clause 13 of the Rules for the use of lump-sum pension payments to improve housing conditions in accordance with the legislation of the Republic of Kazakhstan) provides the authorized operator documents confirming the intended purpose of the lump-sum pension benefit.
If the authorized operator is not provided with supporting documents within the prescribed period, these funds are subject to return to the UAPF to the contributor's pension saving account.
At the same time, you can return the transferred amount by submitting a corresponding application to Otbasy Bank Housing Construction Savings Bank JSC, which the bank must execute within 3 (three) business days from the date of receipt of the application for a refund from the beneficiary.
Please note that within 45 working days after the transfer of the amount of pension savings requested by the depositor from the UAPF to the special account of the authorized operator, this amount does not participate in investment management and, therefore, investment income ceases to accrue to it.
If we talk about possible losses, then, for example, the annual return of the UAPF's pension assets for 2020 was 10.92%. Based on these data, when the average amount of a one-time pension benefit is returned in the amount of, for example, 5.5 million tenge from the special account of the authorized operator in the UAPF, unused for its intended purpose within 45 working days, the amount of investment income lost by the contributor may be about 100 thousand tenge.
In addition, the statutory guarantee of the state for their safety, taking into account the inflation rate, does not apply to the pension savings transferred to the special account. Also, individual income tax (IIT) is calculated and withheld from the sums of one-time pension benefits from the UAPF according to the method chosen by the contributor and specified in his application.
Based on this, in order to exclude cases of return of funds to the UAPF, loss of investment income and state guarantees, as well as premature calculation of the IIT, we recommend that contributors responsibly and carefully plan the use of lump-sum pension benefits. Before submitting an application, you should carefully study the list of documents required to confirm the intended use of pension savings, and ensure that they are provided to the authorized operator in a timely manner.