On 1 January 2021, the Agreement on Pension Coverage of Employees of the Eurasian Economic Union Member States, ratified by the Republic of Kazakhstan on 7 December 2020 (hereinafter - "Agreement"), entered into force.

The main purpose of the Agreement is formation of equal rights in the field of pension coverage among citizens of the EAEU member states. In other words, citizens of a member state of the EAEU performing labour (civil) activity on the territory of the Republic of Kazakhstan shall be entitled to the very same pension coverage rights as the citizens of the Republic of Kazakhstan.

The Agreement additionally envisages: a mechanism for export of pension savings between the EAEU member states, the procedure for medical examination when a disability pension is assigned, inheritance of pension savings, as well as provisions on the required period of employment and calculation of the pension.

Practical aspects of the implementation of the Agreement are regulated by a separate regulatory document – Procedure for Interaction between the Authorized, Competent Bodies of the EAEU Member States and the Eurasian Economic Commission on the Application of the Provisions of the Agreement.

Special attention by Kazakh employers should be drawn to the fact that, according to the Agreement, pension rights granted to citizens of the EAEU member states should be formed from pension contributions on the same conditions and in the same manner as the formation of pension rights of citizens of the Republic of Kazakhstan. This, in turn, obliges Kazakh employers from 1 January 2021 to make mandatory pension contributions in the amount of 10% of income - for all employees that are citizens of the EAEU member states. We would like to add some clarity by suggesting that earlier such a duty existed only in relation to foreign citizens holding residence permits.

Information regarding the occurrence of additional obligations on Kazakh employers has already been confirmed by Akmadi Sarbasov, First Vice Minister of the Ministry of Labour and Social Protection of the Population of the Republic of Kazakhstan1 .

Footnote

1 https://www.zakon.kz/5056803-kak-kazahstantsy-smogut-poluchit.html

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