RESOLUTION OF THE PRESIDENT OF TURKMENISTAN

of August 14, 2006 No. 8012

About enhancement of system of pension insurance

Due to the adoption of law of Turkmenistan "About pensions" in the new edition and for the purpose of enhancement of the organization and accounting of pension accruals and their investment I decide:

1. Approve enclosed:

Regulations on the organization and conducting the personified accounting on pension insurance;

Procedure and conditions of investment of pension accruals.

2. To the Ministry of Social Welfare of Turkmenistan to form in central office of the Ministry management on pension accruals, within the number of staff of workers established on central office of the Ministry and to approve Regulations on it.

3. Recognize invalid:

Items 1, 3, 4, 5, 7, the paragraph third Item 11, Item 13, paragraphs two, third, the fourth, the fifth, the seventh, eighth and tenth Item 14 of the resolution of the President of Turkmenistan from 21 Gorkut of 1998 No. 3781 "About measures for enhancement of provision of pensions in Turkmenistan" (Collection of acts of the President of Turkmenistan and decisions of the Government of Turkmenistan, 1998, No. 7, the Art. 4691);

the resolution of the President of Turkmenistan from 14 Nowruz of 2002 No. 5567 "About some questions of provision of pensions in Turkmenistan" (Collection of acts of the President of Turkmenistan and decisions of the government of Turkmenistan, 2002, No. 3, the Art. 119);

the paragraph third Item 1 of the resolution of the President of Turkmenistan from 27 Turkmenbashi of 2006 No. 7744 "About measures for enhancement of social security system in Turkmenistan" (Collection of acts of the President of Turkmenistan and decisions of the Government of Turkmenistan, 2006, No. 1, the Art. 25).

Approved by the resolution of the President of Turkmenistan of August 14, 2006 No. 8012

Regulations on the organization and conducting the personified accounting on pension insurance

General provisions

1. This Provision is developed according to article 13 of the Law of Turkmenistan "About pensions" in the new edition and determines procedure for the organization and conducting the personified accounting of pension accruals by the national voluntary pension insurance.

Provision of pensions is based on funded pension system. Object of the personified accounting are the insured faces covered by the national voluntary pension insurance.

The personified accounting on the funded pension system based on pension contributions of citizens is performed with 1 Alp Arslan 1998 and extends to the citizens occupied with labor activity, including business activity on contractual basis, rural, personal subsidiary and household, and also other activities without application of work on contractual basis.

The organization and conducting the personified accounting of pension accruals is performed by the Ministry of Social Welfare of Turkmenistan and its territorial authorities.

The basic concepts and terms applied in this Provision

2. Funded pension system - the system based on the voluntary insurance pension contributions paid by citizens on the state provision of pensions.

The employer - legal entities, including foreign legal entities and their separate divisions, the international organizations performing the activities in the territory of Turkmenistan and also individual entrepreneurs, including the foreign citizens, stateless persons involving work on contractual basis.

Insured persons are persons covered by the national voluntary pension insurance.

Self-employed persons are persons occupied with individual business activity, and also rural, personal subsidiary both household and other activities without application of work on contractual basis and independently paying insurance pension contributions.

The national voluntary pension insurance, insurance performed on the basis of the agreement of voluntary pension insurance (further hereinafter is referred to as the agreement) signed between citizens and social welfare institutions.

Voluntary insurance pension contributions of citizens (fees hereinafter are referred to as further) - the money paid according to the procedure and the terms determined by this Provision. The size of fees are established as a percentage to wages amount, profit (net income).

The size of fees is established by the agreement, but at least 2 percent from the salary (profit) received both in the territory of Turkmenistan and beyond its limits. Base for calculation of the size of pension contribution for self-employed citizens without formation of legal entity is their monthly income, but the average monthly salary across Turkmenistan for previous year suffices.

Persons occupied with production of agricultural products pay pension contributions through organizations of banks taking into account seasonality of the made products, but at least once a year.

The personified accounting - the organization and maintaining in accordance with the established procedure accounting:

the data arriving from employers, persons who are independently paying fees and self-employed persons on fees on the national voluntary pension insurance;

the income charged on pension accruals;

expenses on payment of funded pensions and pension accruals, including lump sum payments.

The personified accounting of voluntary pension contributions of citizens and charges of investment revenue is performed on the automated basis.

The personal retirement account - the document containing data on pension accruals of persons covered by the national voluntary pension insurance which join in information base of the Ministry of Social Welfare of Turkmenistan.

Pension accruals are cumulative amount:

insurance pension contributions of citizens;

investment revenue;

other sources which are not forbidden by the legislation of Turkmenistan.

The purposes of conducting the personified accounting

3. The personified account is kept for the purpose of:

accounting of fees on the national voluntary pension insurance;

accounting of income of insured citizens gained from investment of pension accruals;

creations of information base for award of pension;

ensuring reliability of data on the salary (income), fees on pension insurance;

enhancement of methods of appointment and payment of funded pension, pension accruals;

creations of single basic information system of accounting of insured persons, their pension accruals;

creation of information base for expense forecasting on pension payment.

The personified accounting on the national voluntary pension insurance is performed by social welfare institutions on the basis of the special computer program developed for these purposes.

4. The personified account is kept from coming into force of the agreement and continues to complete expenditure of means of pension accruals on the personal retirement account.

Source documents of the personified accounting on the national voluntary pension insurance

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