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Kazakhstan has introduced mandatory occupational pension contributions for employees working in harmful (extremely harmful) working conditions
Kazakhstan has introduced mandatory occupational pension contributions for employees working in harmful (extremely harmful) working conditions.
In line with Michael Wilson & Partners’ practice of keeping you up to date with important legal developments that may influence your business, we would like to draw your attention to recent changes to the legislation on pension
On 10 January 2014 Kazakhstan has adopted a Law “On Introduction of Changes and Amendments into Certain Legislative Acts of the Republic of Kazakhstan on Social Welfare Issues”. The amendment law is designed to improve the social welfare of certain groups of the society and increase employers’ interest to improve working conditions of its employees. In particular, the law has introduced amendments to the Law “On Pension System in the Republic of Kazakhstan”, according to which employers of individuals engaged in harmful industries or harmful labour conditions are required to pay at their expense an additional 5% mandatory occupational pension contributions (the “Occupational Pension Contributions”) payable to the Single Cumulative Pension Fund (the “SCPF”) on the employees’ monthly employment income used for the calculation of pension contributions. The amendments came into effect as of 1 January 2014.
The list of production areas, jobs and occupations with harmful (extremely harmful) working conditions (the “List”) was approved by Governmental Resolution No.1562, dated 31 December 2013. The List is broken down in 17 sections with a broad range of production areas, jobs and occupations related to exploration and production of solid minerals, hydrocarbons, as well as their processing, including metal conversion.
The main criteria for such occupations to be included in the List are as follows:
- presence of harmful production factor;
- not less than 80% of time of an employee is spent working in harmful (extremely harmful) labour conditions;
- preservation of harmful labor conditions (not lower that the third class of harmfulness) confirmed by the results of certification of production facilities in working conditions.
If during the production facilities certification process, it is confirmed that no harmful working conditions are present, an employer may stop paying Occupational Pension Contributions with respect to employees engaged in respective jobs.
It is expected that a 5% mandatory contributions for employers across all industries as well as gradual increase of Occupational Pension Contributions up to 10%.
This Legal Alert is issued to inform clients and other interested parties of time-sensitive legal developments which may affect or otherwise be a special interest to them. The comments above do not constitute legal advice or opinion and should not be acted upon in any specific situation without appropriate legal advice. No part of this alert may be copied or quoted without the prior written consent of Michael Wilson & Partners, Limited. We hope that you will find this overview helpful. For further information on the above issues, please do not hesitate to contact Jypar Beishenalieva at: +7 727 2584890 or jab@mwp.kz.
In line with Michael Wilson & Partners’ practice of keeping you up to date with important legal developments that may influence your business, we would like to draw your attention to recent changes to the legislation on pension
On 10 January 2014 Kazakhstan has adopted a Law “On Introduction of Changes and Amendments into Certain Legislative Acts of the Republic of Kazakhstan on Social Welfare Issues”. The amendment law is designed to improve the social welfare of certain groups of the society and increase employers’ interest to improve working conditions of its employees. In particular, the law has introduced amendments to the Law “On Pension System in the Republic of Kazakhstan”, according to which employers of individuals engaged in harmful industries or harmful labour conditions are required to pay at their expense an additional 5% mandatory occupational pension contributions (the “Occupational Pension Contributions”) payable to the Single Cumulative Pension Fund (the “SCPF”) on the employees’ monthly employment income used for the calculation of pension contributions. The amendments came into effect as of 1 January 2014.
The list of production areas, jobs and occupations with harmful (extremely harmful) working conditions (the “List”) was approved by Governmental Resolution No.1562, dated 31 December 2013. The List is broken down in 17 sections with a broad range of production areas, jobs and occupations related to exploration and production of solid minerals, hydrocarbons, as well as their processing, including metal conversion.
The main criteria for such occupations to be included in the List are as follows:
- presence of harmful production factor;
- not less than 80% of time of an employee is spent working in harmful (extremely harmful) labour conditions;
- preservation of harmful labor conditions (not lower that the third class of harmfulness) confirmed by the results of certification of production facilities in working conditions.
If during the production facilities certification process, it is confirmed that no harmful working conditions are present, an employer may stop paying Occupational Pension Contributions with respect to employees engaged in respective jobs.
It is expected that a 5% mandatory contributions for employers across all industries as well as gradual increase of Occupational Pension Contributions up to 10%.
This Legal Alert is issued to inform clients and other interested parties of time-sensitive legal developments which may affect or otherwise be a special interest to them. The comments above do not constitute legal advice or opinion and should not be acted upon in any specific situation without appropriate legal advice. No part of this alert may be copied or quoted without the prior written consent of Michael Wilson & Partners, Limited. We hope that you will find this overview helpful. For further information on the above issues, please do not hesitate to contact Jypar Beishenalieva at: +7 727 2584890 or jab@mwp.kz.