Jamishev announces that the European Political Party (EPP) is developing a simulated experience for engagement with the pension system
In Kazakhstan, the Unified Social Payment (USP) has been a significant part of the social and economic landscape, especially for self-employed individuals. However, this system is set to change in 2024, as the parliament has voted to abolish the USP.
The USP, initially introduced to stimulate entrepreneurial activity by reducing mandatory payments, has been a popular choice for over a million individual entrepreneurs in the country. However, concerns have been raised about the impact of its abolition on pension contributions.
Bolat Zhamshev, a financier and chairman of the "Qazaqstan halygy" fund, recently expressed his concerns in an interview with the YouTube channel of the National Pension Fund (NPF). Zhamshev voiced his worries about the post-USP system's potential impact on pension contributions, particularly for self-employed individuals.
After the USP's abolition, self-employed individuals will be obligated to accumulate pension amounts through mandatory contributions to the Unified Accumulative Pension Fund (UAPF) or a similar pension accumulation fund. The exact minimum required accumulation or contribution rate post-USP abolition is not explicitly detailed, but it is likely that self-employed persons must make pension contributions analogous to employee rates (around 10% on declared income) but paid independently.
Zhamshev also noted that the payment of 7,000 tenge, which is expected to be the payment for individuals after the USP's abolition, is insufficient to even have accumulations at the minimum level set by the government. For a 40-year-old entrepreneur to maintain minimum pension accumulations with a payment of 7,000 tenge, they will need to pay 14,000 tenge in a year.
Moreover, Zhamshev expressed concerns about the potential resource strain on the accumulative pension fund due to the USP's abolition. He also pointed out that the issue is not solely the responsibility of the entrepreneurs but the state as well.
It is not clear why the parliament voted for the amendments to abolish the USP. The rules set for the post-USP system exclude entrepreneurs from the accumulative pension system, and it remains to be seen how the government will address Zhamshev's concerns and ensure a sustainable pension system for self-employed individuals.
Amendments to Kazakhstan’s tax and social contribution codes in 2025 allow deductions for voluntary pension contributions and social contributions under civil contracts, indicating some flexibility or requirement for self-employed individuals to contribute to pension funds. Official guidance from Kazakhstan’s Pension Fund or Ministry of Labor would be needed for precise numeric requirements.
As the abolition of the USP approaches, self-employed individuals in Kazakhstan are urged to stay informed and prepare for the changes in the pension system. The transition may present challenges, but with the right information and planning, it is possible to maintain a secure retirement.
- Bolat Zhamshev, a financier and chairman of the "Qazaqstan halygy" fund, has voiced his concerns about the potential impact of the abolition of the Unified Social Payment (USP) on pension contributions, specifically for self-employed individuals in Kazakhstan.
- After the USP's abolition, self-employed individuals will be obligated to make mandatory contributions to the Unified Accumulative Pension Fund (UAPF) or a similar pension accumulation fund.
- Zhamshev also pointed out that the payment of 7,000 tenge, expected to be the payment for individuals after the USP's abolition, is insufficient to maintain minimum pension accumulations according to government standards, requiring self-employed persons to pay an estimated 14,000 tenge annually to reach the minimum level.
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