On December 23, 2020, the Parliament of Kazakhstan adopted the law "On Amendments and additions to certain Legislative Acts of the Republic of Kazakhstan on the restoration of economic growth", which provides for the use of part of pension savings for targeted needs. According to the law, from 2021, UAPF depositors will be granted the right to use part of their pension savings to improve housing conditions, pay for medical treatment or transfer them to private management companies.
The right to use part of their pension savings for targeted needs will be able to use:
- working citizens who have pension savings formed at the expense of mandatory pension contributions (OPV) and mandatory professional pension contributions (OPV). The right to targeted use is provided for citizens who have savings that exceed a certain threshold of minimum sufficiency, which is determined for each age separately.
- established pensioners (including pensioners from the number of law enforcement agencies) - within the limits of no more than 50% of the remaining amount of pension savings in the UAPF. The right is provided provided that the aggregate amount of their pension (including the old-age or superannuation pension, the basic pension) provides for the replacement of lost income at a level that meets international standards (at least 40%).
- persons who have concluded pension annuity contracts with insurance companies that provide them with lifetime annuity payments.
Citizens will contact the authorized operator regarding the improvement of housing conditions and treatment. Otbasy Bank was determined by the decision of the Government of the Republic of Kazakhstan on the use of pension savings for treatment by such an operator.
The UAPF will continue to keep a personalized record of pension savings and will make one-time payments for these purposes by sending the amounts of savings determined by the depositor independently, at the request of the authorized body, received in the form of an electronic notification. You can find out the available amount of pension savings in your personal account on the UAPF website or mobile application.
We remind you that according to paragraph 1 of Article 320 of the Tax Code, income in the form of pension payments from the UAPF is subject to individual income tax (IIT) at the rate of ten percent at the source of payment. Withholding of IPN is made collectively from all amounts of payments to the depositor (recipient) at the expense of OPV and OPV. At the same time, according to the Law "On Amendments and Additions to the Code "On Taxes and Other Mandatory Payments to the Budget" (Tax Code)," individuals are granted the right to defer payment of individual income tax when they use one-time pension payments in accordance with the legislation on pension provision, as well as determining the procedure for calculating, withholding and paying it.
In addition, taking into account the application of tax deductions for categories of persons for whom information confirming the benefit can be obtained by the UAPF from the IP of state bodies integrated with the UAPF IP. At the same time, other categories of persons can apply tax deductions when submitting supporting documents, relevant applications to the offices of the UAPF.
Topic 2
On the transfer of pension savings to the trust management of the investment portfolio manager
The right to transfer a portion of savings exceeding a certain threshold to investment management companies will allow depositors to participate in the management of their savings.
Persons entitled to transfer pension savings from the trust management of the National Bank of the Republic of Kazakhstan to the trust management of the investment portfolio manager (IPM) are depositors who have pension savings formed at the expense of OPV and (or) OPV. Their savings must exceed the difference between the actual amount and the threshold of the minimum sufficiency of pension savings. In addition, this right applies to citizens who have concluded pension annuity contracts with insurance companies that provide them with lifetime annuity payments.
To transfer pension savings to the trust management of the PPI, you must have:
1) written application of the depositor;
2) an agreement on the trust management of pension assets, as well as a custodial agreement concluded between the UAPF, the UIP and the custodian bank;
3) conditions regarding the sufficiency of pension savings to transfer them to the PPI;
4) that the UIP specified in the depositor's application meets the requirements established by the regulatory legal act of the authorized body.
An application for the selection (change) of the investment portfolio manager or for the return of pension savings held in trust by the investment portfolio manager to the trust management of the National Bank of the Republic of Kazakhstan is submitted to the UAPF, either through the Fund's website or at the UAPF service offices.
It is important to emphasize that the transfer of pension savings from the trust management of the National Bank of the Republic of Kazakhstan to the trust management of the investment portfolio manager (PPI) is not subject to taxation.
Topic 3
Getting information about the state of pension savings for making a decision on their early targeted use
To determine the sufficiency threshold based on your age, you need to obtain an individual retirement account statement (PPI), taking into account investment income. This can be done via Internet connection in your personal account on the enpf website.kz or in a mobile application, to access which the depositor needs an electronic digital signature (EDS can be obtained remotely on the portal egov.kz) or the IIN and password registered in the UAPF database.
At the same time, the depositor will be able to immediately see the amount of pension savings due to OPV and (or) OPV available for withdrawal in order to improve housing conditions and (or) pay for treatment:
- with the retention of individual income tax deferred monthly in equal shares in accordance with the schedule of pension payments established by UAPF JSC in connection with reaching the retirement age; or
- with the deduction of individual income tax at a time in full with a one-time pension payment for the purpose of improving housing conditions and (or) for treatment.
Topic 4
The role of the UAPF in the implementation of the mechanism of early use of pension savings
The main tasks of the UAPF are to ensure reliable accounting of contributions, financial instruments, investment income, providing depositors with information about their savings, providing pension services, and making pension payments.
Since the UAPF is a single accounting center and operator of all information and financial flows of the accumulative pension system, it takes an active part in the implementation of the Law of the Republic of Kazakhstan "On Amendments and Additions to certain Legislative Acts of the Republic of Kazakhstan on the restoration of economic growth", providing technical, organizational, information aspects of these processes in cooperation with state bodies, authorized operator, custodian banks, investment managers and insurance companies, depositors.