The current “Concept for modernization of the pension system” was approved in 2014, which stated that as of January 1, 2014, the total replacement rate amounted to 44.6% of the average monthly wage in the economy as a whole. The replacement rate then peaked in 2019 at 52.7%.
“The UAPF report currently states that as of end of 2022, the average replacement rate (the ratio of the average total pension to the average salary in the country) is about 45%. That is, according to this key indicator, the pension system of Kazakhstan has rolled ten years back. As noted in the UAPF report, the total pension in Kazakhstan is currently dominated by payments from the state budget. As of end of 2022, the average replacement rate due to the funded pension from the UAPF was only 10%,” says the Halyk Finance analytical note.
Since the overwhelming majority of the total pension is formed of payments from the budget today, such a decrease in the replacement rate, starting from 2019, indicates that the state budget is presently not coping sufficiently with the increase in pension costs.
Photos are from open sources.
