The Minister of Labor and Social Protection of Population Tamara Duisenova at the meeting of the Extended Collegium of MLSPP on the results of activities in 2022 and tasks for 2023, told about the principles on which the insurance system in Kazakhstan will develop.

The event was attended by Prime Minister Alikhan Smailov, Deputy Prime Minister Altai Kulginov, and members of the RK Parliament, representatives of central state bodies, deputy akims of regions and cities of national significance, Federation of Trade Unions, NCE "Atameken", international organizations and NGOs.

In the speech Tamara Duisenova noted that the Development Plan of the Ministry for 2023-2027 includes 5 strategic directions, which are aimed at improvement of efficiency of the measures taken by the state in social-labor sphere.

"The fifth strategic direction is the development of the insurance system, which will be aimed at stimulating productive and formalized employment. However, the main trend of the proposed changes is: first, the participation in the system of the state, employers and employees; and second, the strengthening of the relationship between the length of participation and the amount of social benefits. This means that compensation for lost income in case of risks will be made mostly at the expense of accumulated pension and insurance assets of citizens", - said the head of MLSPP.

The Minister noted that to date the share of public payments prevails both in the pension system and in the compulsory social insurance system. Most of the population still believes that only the state should be responsible for their social security.

"Despite the compulsory systems of pension and social insurance, coverage remains low where private insurance companies operate. Not only the self-employed remain uncovered, but also a certain proportion of wage earners.

Excluding the upper income limits, the levels of income on which pension contributions and social contributions are deducted are also different. The median income for pension contributions is 20% lower than the average monthly wage in the economy. 

Large employers and employees of harmful industries pay attention to high insurance rates, low payments from life insurance companies and lack of transparency of insurance companies," said Tamara Duisenova, emphasizing that failure to take action could lead to further issues of trust and financial stability of the system.

The Minister said that together with the UAPF, SSIF, SAC and insurance companies will be implemented a large-scale awareness and defined the KPI for each institution in terms of growth of the system participants.

There will also continue to be a gradual increase in pension and insurance benefits linked to years of service.

"The changes to the pension system adopted this year, as instructed by the head of state, will allow citizens to receive a pension of at least 40% of their previous income. The increase primarily began with pensioners receiving the minimum basic pension. This year, the size of only the basic pension for this category of pensioners was raised to 21%. The gradual increase will be carried out over 5 years, that is, from 2023 to 2027, which will allow to cover last year's inflation and its projected corridor for subsequent years.   

The same work will be carried out in the social insurance system. This year, up to 45% of the previous income will be brought to social payments for unemployment", - noted the head of MLSPP.

In conclusion, Tamara Duisenova said that starting in 2024, mandatory pension contributions by employers will be introduced to form a notional accumulative pension system for young contributors.

In addition, in order to improve the efficiency of the cumulative pension system, it is envisaged to give depositors the right to transfer 50% of their pension savings to private management.

Source: MLSPP's website https://www.gov.kz/memleket/entities/enbek/press/news/details/488241?lang=ru