Money from the National Social Fund has now been transferred to the bank accounts of Kazakhstan residents, totaling 49 billion tenge.
In a move to accommodate the financial needs of its citizens, the Single Accumulative Pension Fund (SAFP) in Kazakhstan has processed over 50,000 applications for early withdrawals of savings, transferring a total of 49 billion tenge to the accounts of Kazakhstani individuals.
Among those seeking early access to their pension savings is Rinat Mustafin, a 37-year-old resident of the capital, who plans to withdraw part of his savings to partially repay his mortgage. However, to avoid rejection of their savings requests, the SAFP advises applicants to be more careful when filling out their applications.
The SAFP imposes a 10% deduction on early withdrawals as a penalty to discourage premature access to pension savings, ensuring that funds are preserved for retirement purposes. This deduction, known as the Individual Pension Fund (IPN), is immediately deducted upon withdrawal and does not incur any additional burden upon retirement.
Regarding the IPN, it is separate from the Individual Income Tax (IPN) that applies to the withdrawn funds under Kazakhstan's tax regime. The exact handling of tax treatment and any exemptions may vary based on individual circumstances and prevailing tax laws. It is worth noting that the IPN payment period is spread over 16 years upon reaching pension age.
To facilitate the process further, the SAFP currently has agreements with four second-tier banks, and users will be able to change the purposes of withdrawing pension savings, edit applications, and even cancel them on the website enpf-otbasy.kz.
While some applications were received from individuals who had no savings at all, the reason for rejecting applications was that depositors indicated a sum exceeding the sufficiency threshold in their applications. Lazzat Ibragimova, chairperson of the board of directors of AO "Otbasys Bank", announced additional functionality on the website enpf-otbasy.kz, including the opportunity for Kazakhstanis to use their savings for in vitro fertilization (IVF) procedures.
Since the beginning of the year, around 1.2 million people have inquired about their pension contributions in electronic format, indicating a growing interest in understanding and managing their pension savings. The rules for withdrawing funds from the SAFP for medical treatment are currently being approved by the Ministry of Justice.
Recipients of early pension payments have used the funds to partially or fully cover their mortgages, demonstrating the need for flexibility in pension access for certain financial obligations. As the SAFP continues to process applications, it remains committed to providing its citizens with accessible and efficient pension services.
- Rinat Mustafin, a 37-year-old resident, plans to withdraw part of his pension savings from the SAFP to repay his mortgage, highlighting the need for flexibility in pension access for personal-finance matters.
- Applicants seeking early access to their pension savings from the SAFP must be cautious when filling out their applications to avoid rejection, ensuring they do not indicate a sum exceeding the sufficiency threshold.
