Use of pension savings by pensioners based on length of service

On July 1 of this year, the Social Code will come into force, introducing a number of innovations regarding the funded pension system.

One important innovation is the ability for recipients of long-service pension payments to use the entire amount of their pension savings through mandatory pension contributions to improve their housing conditions and/or pay for medical treatment for themselves, their spouse, or close relatives.

It should be noted that individuals entitled to long-service pension payments include military personnel (except conscripts), employees of special government and law enforcement agencies, the state courier service, and other individuals with at least twenty-five years of military service, service in special government and law enforcement agencies, or the state courier service, and who have reached the maximum age for service upon discharge from service established by the legislation of the Republic of Kazakhstan.

A more detailed list of individuals entitled to pension payments for length of service is defined by Article 212 of the Social Code (before July 1, 2023, by Article 64 of the Law of the Republic of Kazakhstan "On Pension Provision in the Republic of Kazakhstan").

If recipients of pension payments for length of service have pension savings in the Unified Accumulative Pension Fund (UAPF) formed through mandatory professional pension contributions, they will be able to receive them upon reaching the generally established retirement age.

Until July 1, 2023, recipients of pension payments for length of service were entitled to a lump sum pension payment of no more than 50 percent of their pension savings formed through mandatory pension contributions and/or mandatory professional pension contributions of the contributor (recipient), provided that the average monthly income replacement ratio of the recipient is at least 40 percent, as established in the manner prescribed by the Government of the Republic of Kazakhstan. When calculating the average monthly income replacement ratio, the recipient's income prior to the retirement date is taken into account, but no more than the average monthly income in the country.

Where should I apply for lump-sum pension payments?

Lump-sum pension payments from the UAPF for housing improvements should be submitted through the enpf-otbasy.kz portal to JSC Housing Construction Savings Bank Otbasy Bank or to second-tier banks: JSC Halyk Bank of Kazakhstan, JSC Altyn Bank, JSC Bank CenterCredit, JSC Bank Freedom Finance Kazakhstan. For medical treatment, apply only to JSC Housing Construction Savings Bank Otbasy Bank. Media Contacts: press@enpf.kz Official Website: www.enpf.kz Facebook, Instagram: enpf.kz Press Center of JSC UAPF You can learn more about other aspects of the Social Code, which comes into force on July 1 of this year, from the Fund's specialists.

The UAPF was established on August 22, 2013, on the basis of JSC NPF UAPF. 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 exercises trust management of the UAPF's pension assets. Effective January 1, 2016, the functions of developing proposals to improve the efficiency of pension asset management were transferred to the National Fund Management Council. In accordance with pension legislation, the UAPF collects mandatory pension contributions, mandatory professional pension contributions, voluntary pension contributions, pension payments, individual accounting of pension savings and payments, and provides the contributor (recipient) with information on the status of their pension savings (more details at www.enpf.kz)