Kazakhstan PM calls to increase pension contributions 30 сентября 2013, 13:01
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Kazakhstan Prime-Minister Serik Akhmetov
Kazakhstan Prime-Minister Serik Akhmetov believes that Kazakhstan’s pension system requires further reformation: the compulsory pension contributions will be gradually increased from the current 10%.
“We have around 2.7 million of self-employed population. Around 1.3 million of them are people involved in their own companies who are not officially employed and do not get paid officially and thus, they don’t make any pension contributions,” he said in an interview to KTK channel, Interfax-Kazakhstan reports.
“The main objective of the coming pension reforms is to get as many as possible of our citizens who are currently not covered by the pension system involved it,” Akhmetov said.
“Of course, in some cases this will only mean minimal pensions. The issue of pension payments to militarymen should also be resolved. There is quite a large block of issues that require further study and we will have to review them with the government,” he said.
Akhmetov supports the recent decision to oblige employers to contribute additional 5-percent (of the employees salaries) to the pension saving accounts in addition to the regular 10% for cases when the employees are working in severe conditions (the list of such professions is approved by the government). “I think that this is a very proper decision, especially that these payments are deduced from the employer's income before it becomes liable to tax,” he added.
“The next stage is to increase the pension contributions and the question here is by how much we want to increase them,” he said. According to the Prime-Minister, Kazakhstan is not likely to reach "Singapore where pension contributions make 40 percent”. “But we will gradually increase (the contributions), as our society gets richer, the middle-class gets large, and more and more people get covered by the pension system. This will govern the phasing of the increase of the compulsory pension contributions, including those made by employers,” he said.
One of the stages of Kazakhstan’s pension reform included the gradual increase of the retirement age for women from the current 58 to 63 years in 2027.