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How does the employer's mandatory pension contribution system work?

Starting from January 1, 2024, the savings system of Kazakhstan has been supplemented with a new component. These are employer’s mandatory pension contributions (MPC). Now, in addition to the mandatory 10 percent contributions from the employee’s income, every employer is obliged to transfer extra contributions from their own funds to the UAPF, in favor of their employees, the fund’s press service reports.
How does the employer's mandatory pension contribution system work?

“Payment of contributions is made from the employer’s funds, but their size is calculated from the employee’s income. In 2024, this is 1.5 percent,” the UAPF release informs.

The contribution will be increasing by 0.5% every year, and by 2028 it will be 5%:

from 2024 - 1.5 percent;

from 2025 - 2.5 percent;

from 2026 - 3.5 percent;

from 2027 - 4.5 percent;

from 2028 - 5 percent.

MPC will be transferred only for employees born after January 1, 1975. However, the employee’s monthly income must not be lower than the minimum wage and must not exceed 50 times the minimum wage.

For tax agents who have chosen to pay MPC as part of a single payment, the share of MPC in the rate of the single payment from wages is as follows:

from January 1, 2024 – 7.0 percent;

from January 1, 2025 – 10.5 percent;

from January 1, 2026 – 14.1 percent;

from January 1, 2027 – 17.4 percent;

from January 1, 2028 – 19.0 percent.

“The Social Code clearly defines the obligation of employers to pay mandatory pension contributions exclusively from their own funds. Depositors will be able to see the receipt of this type of contribution in the statement from the individual pension account, which provides information on all types of contributions. Control over the timeliness and completeness of payment of mandatory pension contributions by the employer is entrusted to the State Revenue Committee. If the employer commits any violation against the employee, it is necessary to contact the State Revenue Committee,” the UAPF concluded.

Photos are from open sources.

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