LAW OF THE REPUBLIC OF KAZAKHSTAN

of June 21, 2013 No. 105-V ZRK

About provision of pensions in the Republic of Kazakhstan

This Law determines legal and social basis of provision of pensions of citizens in the Republic of Kazakhstan, regulates participation of state bodies, physical persons and legal entities in realization of constitutional right of citizens on provision of pensions.

Chapter 1. General provisions

Article 1. The basic concepts used in this Law

In this Law the following basic concepts are used:

1) The Government for Citizens State corporation (further - the State corporation) - the legal entity created according to the decision of the Government of the Republic of Kazakhstan for rendering the state services, services in issue of specifications on connection to networks of subjects of natural monopolies and services of subjects of the quasi-public sector according to the legislation of the Republic of Kazakhstan, the organization of work on reception of applications on rendering the state services, services in issue of specifications on the connection to networks of subjects of natural monopolies, services of subjects of the quasi-public sector and issue of their results to uslugopoluchatel by the principle of "one window", and also ensuring rendering the state services electronically performing state registration of the rights to real estate in the place of its stay;

1-1) diversifications - placement of pension assets in various financial instruments for the purpose of decrease in risk of their losses according to the requirements established by National Bank of the Republic of Kazakhstan;

2) the printing edition - periodic printing editions which list is determined by authorized body;

2-1) one-time retirement benefit - the amount of the pension accruals created at the expense of compulsory pension contributions and (or) compulsory professional pension contributions, withdrawn by the investor (receiver) from the single accumulation pension fund for the purpose of improvement of housing conditions and (or) payment of treatment, according to the procedure, established by this Law;

3) the single accumulation pension fund - the legal entity performing activities for attraction of pension contributions and retirement benefits, and also other functions determined by this Law;

3-1) organization for forming and maintaining the database - the non-profit organization created in form of business of joint-stock company which hundred percent of voting shares belong to National Bank of the Republic of Kazakhstan, the performing activities for forming and maintaining the single database on insurance according to the Law of the Republic of Kazakhstan "About insurance activity";

4) minimum pension - the minimum size of pension established for the corresponding financial year by the law on the republican budget;

5) the Voluntary accumulation pension fund - the professional participant of the security market performing based on the license of authorized body activities for management of investment portfolio with the right of attraction of voluntary pension contributions;

6) voluntary pension contributions - the money placed by investors on the initiative in the single accumulation pension fund and (or) the Voluntary accumulation pension fund for benefit of the receiver of retirement benefits according to the procedure, determined by the legislation of the Republic of Kazakhstan and the pension provision agreement at the expense of voluntary pension contributions, and (or) the unclaimed amount of warranty compensation on the guaranteed deposit listed by the organization performing obligatory guaranteeing deposits in the single accumulation pension fund according to the Law of the Republic of Kazakhstan "About obligatory guaranteeing the deposits placed in banks of the second level of the Republic of Kazakhstan

7) the pension provision agreement at the expense of voluntary pension contributions - the agreement on establishment, change or the termination of the legal relationship connected with voluntary pension contributions, accumulatings and receipt of retirement benefits which conditions are accepted by the investor (receiver) precisely by accession to the offered agreement in general;

8) the rate of voluntary pension contributions - the amount of payment in the single accumulation pension fund which is determined by physical person independently and can be changed at its discretion, and (or) the Voluntary accumulation pension fund which is determined by physical person independently and can be changed at its discretion, determined by the pension provision agreement at the expense of voluntary pension contributions;

9) the investor of voluntary pension contributions - the physical person or legal entity performing at the expense of own means and also the physical person performing at the expense of the unclaimed amount of warranty compensation on the guaranteed deposit voluntary pension contributions for benefit of the receiver of retirement benefits according to the pension provision agreement at the expense of voluntary pension contributions;

10) the individual retirement account - the personal personalized account of the investor (the receiver of retirement benefits) on which compulsory pension contributions or compulsory professional pension contributions, or voluntary pension contributions, investment revenue, penalty fee and other receipts according to the legislation of the Republic of Kazakhstan are considered and from which retirement benefits are made;

10-1) person who is engaged in private practice - the private notary, the private legal executive, the lawyer, professional mediator;

11) the accumulation pension fund - the legal entity performing activities for attraction of pension contributions and retirement benefits whose license is terminated according to item 4 of article 73 of this Law;

12) pension - set of the state base retirement benefit and (or) retirement benefits on age and (or) retirement benefits for long service and (or) from the single accumulation pension fund, and (or) the Voluntary accumulation pension fund;

13) pension assets - the money, securities, other financial instruments intended for providing and implementation of retirement benefits, the translations, and also other purposes provided by this Law;

14) the agreement of retirement annuity - the insurance contract according to which one party (insurer) shall transfer to insurance company the amount of pension accruals (the redemption amount) and other party (insurance organization) shall perform insurance payments for benefit of the insurer and (or) insured (insured) for life or during the certain period of time;

15) pension accruals - the money of the investor (the receiver of retirement benefits) considered on its individual retirement account, including compulsory pension contributions, compulsory professional pension contributions and voluntary pension contributions, investment revenue, penalty fee and other receipts according to agreements, this Law, the legislation of the Republic of Kazakhstan;

15-1) threshold of the minimum sufficiency of pension accruals - the minimum size of the pension accruals created at the expense of compulsory pension contributions and (or) compulsory professional pension contributions necessary for providing monthly pension are not lower than the size of minimum pension, established by the law on the republican budget and acting on the January 1 of the corresponding financial year determined according to the technique approved by the Government of the Republic of Kazakhstan;

16) retirement benefits:

on age - payments to the physical persons having working life at least six months as of January 1, 1998 performed in proportion to working life;

for long service - payment by the serviceman, to the staff of special state and law enforcement agencies, the public courier service, and also persons which right to have special ranks, class ranks and to wear uniform are abolished since January 1, 2012, and to persons whose medical positions are reduced in law-enforcement bodies of the Republic of Kazakhstan since July 1, 2022 and on January 1, 2023, having at the time of reducing position length of service at least twelve years and six months of continuous military service, service in special state and law enforcement agencies, the public courier service, on condition of continuation of work by them in the medical organizations located in pre-trial detention centers and organizations of criminal and executive (penitentiary) system according to this Law;

from the single accumulation pension fund and (or) the Voluntary accumulation pension fund - payment of pension accruals to receivers of retirement benefits;

from the Voluntary accumulation pension fund - payment to physical persons for whom voluntary pension contributions are paid;

17) the receiver of retirement benefits (further - the receiver) - physical person to which the state base retirement benefit and (or) retirement benefits on age, and (or) retirement benefits for long service, and (or) retirement benefits from the single accumulation pension fund and (or) the Voluntary accumulation pension fund are appointed;

18) the investment declaration - the document determining the list of investment objects, the purposes, strategy, conditions and restrictions of investing activities on pension assets, conditions of hedging and diversification of pension assets;

19) investment portfolio - set of the financial instruments which are part of pension assets;

19-1) managing director of investment portfolio - the professional participant of the security market performing on its own behalf both in interests and for customer account activities for management of investment portfolio based on the license according to the laws of the Republic of Kazakhstan "About the security market" and "About permissions and notifications", and also conforming to requirements of authorized body for implementation of management of pension assets;

20)  No. 262-VI ZRK is excluded according to the Law of the Republic of Kazakhstan of 03.07.2019;

21) investment revenue - the money received (which are subject to obtaining) as a result of investment of pension assets;

22) bank custodian - The National Bank of the Republic of Kazakhstan or bank of the second level having the license of authorized body for custodial activities;

23-1) The state Social Insurance Fund - the legal entity making accumulation of social assignments, appointment and implementation of social payments to participants of system of compulsory social insurance concerning which there came the case of social risk including family members - dependents in case of loss of the supporter;

23) the custodial agreement - the agreement of storage and the order signed by bank custodian and its client, determining procedure for provision to the client of services in custodial servicing;

24) the state base retirement benefit - the monthly money payment provided on reaching retirement age, stipulated in Item 1 article 11 of this Law;

25) compulsory pension contributions - the money placed according to this Law in the single accumulation pension fund according to the procedure, established by the legislation of the Republic of Kazakhstan;

26) debt on the compulsory pension contributions compulsory for professional pension contributions the compulsory pension contributions - estimated, withheld (added) and not listed in the single accumulation pension fund, compulsory professional pension contributions in the terms established by this Law and also outstanding amounts of penalty fee;

27) the pension provision agreement at the expense of compulsory pension contributions, compulsory professional pension contributions - the agreement of accession which conditions are accepted by the investor (receiver) precisely by accession to the offered agreement in general;

28) the agent on payment of compulsory pension contributions, compulsory professional pension contributions (further - the agent) - physical person or legal entity, including the foreign legal entity performing activities in the Republic of Kazakhstan through the permanent organization, branches, representations of foreign legal entities estimating, holding (charging) and listing compulsory pension contributions, compulsory professional pension contributions in the single accumulation pension fund according to the procedure, determined by the legislation of the Republic of Kazakhstan.

As the agent on calculation (charge), transfer of single payment for workers the tax agents determined according to article 776-1 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" (Tax code) are considered.

The insurance company is considered as the agent.

As the agent on payment of compulsory pension contributions for the physical persons gaining income under agreements of civil nature which subject is performance of works (rendering services) the tax agents determined by the tax legislation of the Republic of Kazakhstan are considered (further - tax agents);

29) rate of compulsory pension contributions - the amount of payment in the single accumulation pension fund expressed as a percentage of the income of the investor accepted for calculation of compulsory pension contributions and (or) to the insurance payments performed as the indemnification connected with loss of earnings (income);

30) the investor of compulsory pension contributions - the physical person having the individual retirement account in the single accumulation pension fund;

31) compulsory professional pension contributions - the money transferred by agents at the expense of own means in the single accumulation pension fund for benefit of workers borrowed at works with harmful working conditions which professions are provided by the list of productions, works, professions of workers;

32) rate of compulsory professional pension contributions - the amount of payment of the agent in the single accumulation pension fund expressed as a percentage of the income of the worker accepted for calculation of compulsory professional pension contributions;

33) No. 342-V ZRK is excluded according to the Law of the Republic of Kazakhstan of 02.08.2015

34) the central executive body - the state body performing management and also in limits, stipulated by the legislation the Republic of Kazakhstan, cross-industry coordination in the sphere of social protection of the population;

35) the prudential standard rate - the economic requirements established by regulatory legal act of authorized body for ensuring financial stability of the Voluntary accumulation pension funds;

36) insurance company - the legal entity performing activities for the conclusion and execution of insurance contracts in industry "life insurance" based on the corresponding license of authorized body;

37) the redemption amount - amount of money which in case of early agreement cancelation of retirement annuity the insurer has the right to use for implementation of the translation under again signed agreement of retirement annuity or to receive from insurance company if is the foreigner or the person without citizenship who left on the permanent residence of the Republic of Kazakhstan, submitted the documents determined by the legislation of the Republic of Kazakhstan, confirming the departure fact to insurance company;

37-1) authorized operator - the legal entity (legal entities) determined (determined) by the Government of the Republic of Kazakhstan, performing (performing) opening and maintaining special accounts for lump retirement benefits from the single accumulation pension fund for the purpose of improvement of housing conditions and (or) payments of treatment on which the single accumulation pension fund makes transfer of lump retirement benefits from the pension accruals created at the expense of compulsory pension contributions and (or) compulsory professional pension contributions;

38) authorized body - the state body performing state regulation, control and supervision of the financial market and the financial organizations;

39) the bodies appointing the state base retirement benefit and retirement benefits on age - authorized state bodies;

40)  No. 156-VI ZRK is excluded according to the Law of the Republic of Kazakhstan of 24.05.2018;

41) affiliates - the physical persons or legal entities (except for the state bodies performing control and supervising functions within the powers conferred to them, and national managing holding) having opportunity directly and (or) indirectly to determine decisions and (or) to exert impact on accepted with each other (one of persons) decisions, including owing to the concluded bargain. Availability of national managing holding in shareholding structure of the Voluntary accumulation pension fund is not the basis for determination affiliated on the relation to each other of persons.

Article 2. Right of citizens to provision of pensions

1. Citizens of the Republic of Kazakhstan have the right to provision of pensions according to the procedure, established by the legislation of the Republic of Kazakhstan.

2. The foreigners and persons without citizenship who are constantly living in the territory of the Republic of Kazakhstan have the right to provision of pensions on an equal basis with citizens of the Republic of Kazakhstan if other is not provided by the laws and international treaties.

Article 3. Legislation of the Republic of Kazakhstan on provision of pensions

1. The legislation of the Republic of Kazakhstan on provision of pensions is based on the Constitution of the Republic of Kazakhstan and consists of this Law, other regulatory legal acts of the Republic of Kazakhstan.

1-1. On the single accumulation pension fund, the Voluntary accumulation pension funds and other legal entities performing activities within the specific mode of regulation, regulation of this Law and regulatory legal acts of authorized body, National Bank of the Republic of Kazakhstan accepted according to this Law entered according to the Law of the Republic of Kazakhstan "About state regulation, control and supervision of the financial market and the financial organizations" extend in the limits provided by conditions of specific mode of regulation.

1-2. The regulations of the legislation of the Republic of Kazakhstan on provision of pensions applied in relation to insurance companies extend to the branches of the insurance nonresident organizations of the Republic of Kazakhstan performing activities for the conclusion and execution of insurance contracts in industry "life insurance" based on the corresponding license of authorized body in the territory of the Republic of Kazakhstan.

2. If the international treaty ratified by the Republic of Kazakhstan establishes other rules, than those which contain in this Law are applied rules of the international treaty.

Article 4. The state guarantees on provision of pensions

1. The state guarantees provision of pensions to the citizens who retired till January 1, 1998 with preserving the established size of retirement benefits till April 1, 1999.

2. The state base retirement benefit is provided to physical persons:

1) retirement benefits on age which are appointed till July 1, 2018, and retirement benefits for long service which are appointed till January 1, 2016;

2) reached retirement age according to Item 1 of article 11 of this Law, except for the judges of the Constitutional Court of the Republic of Kazakhstan whose powers are stopped in connection with the expiration of the term of continuance in office established by the Constitution of the Republic of Kazakhstan receiving the monthly perpetual maintenance, the judges in resignation receiving the monthly perpetual maintenance, military personnel, the staff of special state and law enforcement agencies, the public courier service, and also persons which right to have special ranks, class ranks and to wear uniform are abolished since January 1, 2012, and persons whose medical positions are reduced in law-enforcement bodies of the Republic of Kazakhstan since July 1, 2022 and on January 1, 2023, at least twelve years which had length of service at the time of reducing position and six months of continuous military service, service in special state and law enforcement agencies, to the public courier service, on condition of continuation of work by them in the medical organizations located in the pre-trial detention centers and organizations of criminal and executive (penitentiary) system receiving retirement benefits for long service.

The state base retirement benefit is provided:

since January 1, 2023 - in the presence of ten and less years of years of service of participation in the pension system or its absence in the amount of 60 percent from the size of subsistence minimum with increase in its size for each complete year of years of service of participation in the pension system over ten years for 2 percent, but no more than 100 percent from the size of subsistence minimum established for the corresponding financial year by the law on the republican budget;

since January 1, 2024 - in the presence of ten and less years of years of service of participation in the pension system or its absence in the amount of 65 percent from the size of subsistence minimum with increase in its size for each complete year of years of service of participation in the pension system over ten years for 2 percent, but no more than 105 percent from the size of subsistence minimum established for the corresponding financial year by the law on the republican budget;

since January 1, 2025 - in the presence of ten and less years of years of service of participation in the pension system or its absence in the amount of 70 percent from the size of subsistence minimum with increase in its size for each complete year of years of service of participation in the pension system over ten years for 2 percent, but no more than 110 percent from the size of subsistence minimum established for the corresponding financial year by the law on the republican budget;

since January 1, 2026 - in the presence of ten and less years of years of service of participation in the pension system or its absence in the amount of 70 percent from the size of subsistence minimum with increase in its size for each complete year of years of service of participation in the pension system over ten years for 2 percent, but no more than 118 percent from the size of subsistence minimum established for the corresponding financial year by the law on the republican budget;

since January 1, 2027 - in the presence of ten and less years of years of service of participation in the pension system or its absence in the amount of 70 percent from the size of subsistence minimum with increase in its size for each complete year of years of service of participation in the pension system over ten years for 2 percent, but no more than 120 percent from the size of subsistence minimum established for the corresponding financial year by the law on the republican budget.

The size of the appointed state base retirement benefit annually is recalculated according to part two of this Item.

In years of service of participation in the pension system by provision of the state base retirement benefit are set off:

1) the working life developed for the period till January 1, 1998, estimated according to article 13 of this Law;

2) the period for which compulsory pension contributions and (or) compulsory pension contributions of the employer were performed;

2-1) periods of labor, business activity, occupations private practice on types of activity to which according to the decision of the Government of the Republic of Kazakhstan the correction coefficient 0 was applied to rates of compulsory pension contributions, compulsory professional pension contributions;

2-2) periods of implementation of activities, the income from which is excluded from the income of physical person, taxable, according to the subitem 51) of Item 1 of article 341 of the Code of the Republic of Kazakhstan "About taxes and other obligatory payments in the budget" (Tax code);

3) time of leaving of unemployed mother or unemployed father (when implementing of the actual leaving by it) for juvenile children, but no more than before achievement of 3 years by each child of age within 12 years in total;

4) time of child care with disability aged to 18 years;

5) the periods of military service, service in special state and law enforcement agencies, the public courier service;

6) accommodation period abroad spouses (spouse) of staff of diplomatic services of the Republic of Kazakhstan and international organizations, but no more than 10 years in total;

7) the period of accommodation of spouses of the military personnel (except the military personnel of conscription service), the staff of special state bodies with spouses in areas where there was no possibility of their employment in the specialty, but no more than 10 years in total.

8) the periods of labor activity after January 1, 1998 in the Russian organizations of the Baikonur complex.

8-1) periods of receipt of social payment on case of loss of the income in connection with restrictions of activities for action of emergency state, restrictive actions;

9) time of face care with disability of the first group, lonely person with disability of the second group and the retirement pensioner needing assistance, and also for aged, reached eighty-year age;

10) the periods of labor activity of persons specified in the subitem 2) of Item 2 of article 24 of this Law. Since January 1, 2005 the specified periods are set off on condition of implementation of social contributions to the State Social Insurance Fund

The state base retirement benefit is provided at the expense of budgetary funds.

The state base retirement benefit is provided irrespective of receipt of retirement benefits on age and (or) from the single accumulation pension fund, and (or) the Voluntary accumulation pension fund, and also the public social benefit on disability.

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