ORDER OF THE GOVERNMENT OF THE KYRGYZ REPUBLIC

of November 24, 2014 No. 670

About approval of the Concept of development of system of provision of pensions of the Kyrgyz Republic

For the purpose of further development and enhancement of system of provision of pensions, according to articles 10 and 17 of the constitutional Law of the Kyrgyz Republic "About the Government of the Kyrgyz Republic" the Government of the Kyrgyz Republic decides:

1. Approve:

- The concept of development of system of provision of pensions of the Kyrgyz Republic according to appendix 1;

- The paragraph third ceased to be valid according to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of 14.01.2022 No. 9

2. Ceased to be valid according to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of 14.01.2022 No. 9

3. Ceased to be valid according to the Resolution of the Cabinet of Ministers of the Kyrgyz Republic of 14.01.2022 No. 9

4. To impose control of execution of this resolution on department of social development of Government office of the Kyrgyz Republic.

5. This resolution becomes effective after fifteen days from the date of its official publication.

Appendix 1

Approved by the Order of the Government of the Kyrgyz Republic of November 24, 2014 No. 670

Concept of development of system of provision of pensions of the Kyrgyz Republic

Provision of pensions owing to the social importance plays important role in economic, social and political life and in the financial and budget sphere of the state. The pension system is organically connected with market situation of work and wages system, tax and financial systems, and also with demographic and social and economic country situation.

In general the pension system shall consider the current economic situation in this connection reconsideration of the mechanism of interaction of the pension system with economy is required. The system of provision of pensions shall promote stabilization of economy. Permanent implementation of measures for maintenance of level of living of pensioners in the conditions of growth of cost of life is necessary. At the same time main objectives and tasks of provision of pensions shall be directed, first of all, to strengthening of the state guarantees on realization of constitutional right of citizens for pension.

1. The analysis of the current situation in system of provision of pensions of the Kyrgyz Republic

The state obligatory pension system of the Kyrgyz Republic is based on the principle of solidarity and accumulating: the amounts of the paid insurance premiums go for the current financing of retirement benefits to pensioners and investment of means of pension accruals. Other principle of creation of the pension system is the insurance principle: the size of pension of each insured person depends on cumulative insurance premiums on the personal insurance account.

In 1997 number of essential changes was brought in the pension legislation of the Kyrgyz Republic:

- gradual raising the retirement age from 60 to 63 years - for men, from 55 to 58 years - for women;

- cancellation of number of privileges, in particular, early retirement for representatives of some professions and national groups;

- introduction of formula of pension from three components:

the guaranteed basic pension to each pensioner with sufficient years of service;

the provision of pensions according to labor contribution of the worker estimated as percent from the average salary till 1996;

the individual pension contributions which are saved up on the account of the pensioner.

One of positive results is introduction of system of the personified accounting of citizens for the purpose of strengthening of the stimulating role of insurance premiums.

In 2010 steps are taken for further reforming of conditional funded pension system. So, since January 1, 2010 in the Kyrgyz Republic the accumulative component in the amount of 2% of the worker's fee, with preliminary increase it from 8% to 10% was entered into system with conditional and accumulative retirement accounts.

The accumulative component in structure of the pension system is designed to reduce dependence of system of provision of pensions on possible demographic problems in the future and to increase appeal of the pension system.

After implementation of accumulative component the pension system of the Kyrgyz Republic consists of three components:

- state obligatory solidary pension system;

- obligatory accumulative component;

- voluntary individual accumulative system.

The first component consists of the solidary pension system which includes basic part of pension, the first and second insurance parts of pensions.

The second component is obligatory for the citizens of the Kyrgyz Republic working in the organized sector (in budgetary institutions, private companies of various form of business). Citizens list insurance premiums for accumulating in the amount of 2% of the size of the salary (income).

The third, voluntary accumulative component includes the voluntary individual accumulative scheme.

The characteristic of parameters of the pension system in the Kyrgyz Republic

Table 1

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