Kazakhstanis May Be Allowed to Use Pension Savings for Housing and Education

Possible changes to Kazakhstan’s pension system are being discussed again. This time, a working group was presented with a Singapore-style model that would allow citizens to use part of their pension savings before retirement, Orda.kz reports, citing the Ministry of Labor.

Under the proposed model, pension contributions would be distributed across three accounts. Citizens would be able to use part of the money for several purposes before retirement.

Mandatory pension capital will be formed with the possibility of partial use for housing purchases, education payments, medical expenses and investments before retirement. The funds will be distributed between three accounts, one of which allows people to address housing needs through a preferential mechanism,the Ministry of Labor said.

The Unified Accumulative Pension Fund also proposed changing how employers’ pension contributions are distributed. Under the proposal, 4 % would go to an employee’s individual pension account, while 1 % would go to a solidarity insurance component. This would combine the accumulative pension system with lifetime benefits.

The Ministry of Labor stressed that the project is still under review. A final decision will be made only after its social and financial effectiveness is analyzed.

Original author: Alina Elgeldina

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