Chairman of the Cabinet of Ministers of Kyrgyzstan Akylbek Japarov held a meeting on the development of the Social Fund and expansion of coverage of the population with pension insurance. Press service of the Cabinet reported.
There were about 740,000 pensioners in Kyrgyzstan at the beginning of 2023. Every year their number increases by 40,000-50,000 people. Budget expenditures on the payment of pensions also grow. If in 2022 the allocations amounted to 29.4 billion soms, then in 2023 direct transfers from the budget to the Social Fund will amount to 41.4 billion soms. At the same time, the rest of the main share of the Social Fund’s funds is also formed by insurance premiums from budget-funded organizations — 23 billion soms in 2022 and 27.6 billion soms — in 2023. The Cabinet notes that this shows the underdevelopment of pension insurance in the country. The expenditures of the republican budget on pensions will only increase every year, if measures are not taken to reform the pension system.
Tasks were set for the development of voluntary pension insurance, switch to new models of relations between subjects of the pension system and measures to support non-state pension funds.
«We must clearly and openly say to all our young people that the issue of pension savings is their responsibility, and give them the choice to either work with the Social Fund or go to private pension funds. But we are obliged in one way or another to cover the entire population with pension insurance. We must solve this problem this year,» said Akylbek Japarov.
He also noted that the state is obliged to ensure a decent old age for all citizens. This is its constitutional duty. But the country will never achieve the goal of ensuring a decent old age under the current system, where, for example, members of peasant farms pay contributions at fixed rates, averaging only 8 soms per month.
The share of contributions from agricultural workers is 0.6 percent, and the expenditures on their pension reach 40 percent.
The same picture is with individual entrepreneurs and other categories. Draft laws have been already submitted to the Parliament to increase the attractiveness of non-state pension provision.
«It is necessary to conduct a broad information campaign so that all citizens have access to clear, understandable and effective mechanisms for mandatory and voluntary pension programs,» the head of the Cabinet said.
As a result of the meeting, the Social Fund, together with other government agencies, was instructed to create a working group to develop the market for non-state pension services and encourage citizens to participate in voluntary pension insurance.
The State Service for Regulation and Supervision over the Financial Market was instructed to develop draft regulatory legal acts to expand the instruments for investing pension savings for non-state pension funds, as well as to develop professional pension funds. The Social Fund, together with the Accumulative Pension Funds, was recommended to develop work with citizens to improve the financial and pension literacy of the population.
