In January 2021, the Law of the Republic of Kazakhstan “On Amendments and Additions to Certain Legislative Acts of the Republic of Kazakhstan on Restoring Economic Growth” came into force, which gave citizens the right to use part of their pension savings to improve housing conditions, pay for medical treatment, and also to transfer in investment management to private management companies.
This right can be used by contributors who, through the transfer of regular and full pension contributions, have accumulated savings that exceed the minimum sufficiency threshold (MST). At the same time, pension savings available for use by citizens include not only the transferred pension contributions, but also the investment income received from their investment.
The Law “On Pension Provision in the Republic of Kazakhstan” defines that “the threshold of minimum sufficiency of pension savings is the minimum amount of pension savings formed from mandatory pension contributions and (or) mandatory professional pension contributions necessary to ensure a monthly pension not lower than the minimum pension, established by the law on the republican budget and effective as of January 1 of the corresponding financial year, determined in accordance with the methodology approved by the Government of the Republic of Kazakhstan”.
The methodology for determining the MST was approved by the Decree of the Government of the Republic of Kazakhstan dated October 2, 2013 No. 1042 (with amendments and additions dated January 6, 2021).
According to the Methodology, MST values are calculated for each age and take into account the increase (indexation) of future pension payments and pension contributions. At the same time, such social indicators as the minimum wage (MW), minimum pension (MP), the subsistence minimum (SM) are used, which are annually indexed in accordance with the Law of the Republic of Kazakhstan “On the Republican Budget”. In this regard, the calculation of the size of the MST is carried out annually, taking into account the growth of these indicators.
Also, according to the Methodology, to determine the MST, parameters are used that are adopted on an annual basis on the proposal of the Ministry of Labor and Social Protection of the Population of the Republic of Kazakhstan and in agreement with the Ministry of National Economy of the Republic of Kazakhstan.
Since the size of social indicators has been increased for 2022 (in particular, the size of the minimum wage has been increased from 42,500 tenge in 2021 to 60,000 tenge in 2022 (or by 41%), the MST values for 2022 have also increased and are indicated below: