Draft Recommendations

            Social security goal is not only to secure guarantee income when being retired; it should anticipate protection in case of such unforeseen circumstances as illness, disability, unemployment and other social risks. Social security should cover preventive measures and take a complex approach as well as cover full life cycle and contribute to healthy lifestyle which will help escape occurrence of contingencies or pull back their beginning.

            Focus of the conference participants was on the issues of improving the legal regulation of social security relations, necessity of strengthening the support of disadvantaged groups.  

            Conference members note the following:

            1. Financial crisis has weakened the financial status of many social security programs. However, it demonstrated the importance of the social protection systems as the income replacement mechanism and the powerful policy tool at struggle with economic decline. In search of measures to alleviate effect of mounting unemployment, income reduction, and poverty level increase multiple countries use substantial functionalities of social security offices on matters of granting benefits and services. Apart from promoting composite demand and support of job creation, the policy developers agree that social security schemes are a powerful means of flexible backing of individual and family income.  Social security systems confirmed their key role as for a single person, and for the whole society and economy in general.  They became the integral part of common anti-crisis efforts of the states.

            2. Social security programs approved themselves as a principal component of the national strategy on overcoming the crisis as they aid economic recovery owing to composite demand stimulation and guarantee social cohesion, providing for certain level of support for most vulnerable groups. Financial losses which weakened the financial opportunities as state social safety nets and private pension programs, may lead to new risks for the states in securing basic system of social protection. There appears the demand for revising the rules of working and administering private pension system and obligatory social insurance system, in particular, in the spheres where their investment strategy is applied. It is also critical that private pension programs were established to keep contributors out from impact of direct risks of financial market.

            3. The states take different measures of social support of the population. The most financially prosperous states have more opportunities of financial stimulation among other things spending the part of taxes on social assistance.   Thus, the state plays the key role in reduction of risks, support of vulnerable groups and guaranteeing general basic social protection. In Kazakhstan, despite the economic crisis, the state executes previously taken obligations to increase the level of social and pension security. All projected activities on pension and social benefit increase are totally conducted. 

            4. One of the socioeconomic development conditions is population employment strategy. In Kazakhstan the essential instrument of overcoming the crisis has been broadening options of getting earned income within realization of Road Map. For post-crisis development of the country there will be further  modernization of the economy, connected with job creation during implementing innovation and breakthrough projects.   

            5. For successful functioning of the obligatory social security system it is necessary to provide for financial stability of the State Social Insurance Fund as an important institution of the social sphere of Kazakhstan.  At that the principle of social justice should be followed in fulfillment of social payments suitable for granted social contributions.

            6. It is essential to pay greater attention to social and economic results of work-force size reduction, increase of cost burden on social security of the retired.  In this connection rather critical are the issues of actuary calculations of pension security including accumulative and annuity insurance. 

            7. It is necessary to increase insurance coverage of employees from industrial accidents, harden the requirements for employers to fulfill norms of the Law on employees’ insurance.

            8.  Effectiveness of the social security reform to a large extent will be governed by the reached information awareness level of the population.

9. For the purpose of the further development of the pension system it is required to initiate prohibition against granting lump sum payments at the expense of pension savings from the Savings Pension Funds (SPF) to depositors leaving abroad and define the course making provision for:

а) granting payments from the Savings pension fund only at depositor’s old age;

б) transfer of pension savings to the same institutions of the country where the depositor leaves for.

10. One of the mechanisms of the pension system development is elaboration of respectively new type of receiving pension savings – the retirement annuity.

In order to develop retirement annuity it is essential to:

а) neutralize pressure of employers at concluding annuity contract with an employee;

б) increase liability of savings pension funds for efficient assets management for the depositor to have a chance to purchase more advantageous annuity, for example, with indexation or receiving long-term payments as scheduled by SPF due to lowering commission remuneration and\or targeting;

в) for annuity development to implement lump sum from life insurance companies under the retirement annuity contracts until payments at the expense of SPF and life insurance companies are balanced in size assigning lump sum payment with a view to income replacement ratio.

In this connection it is necessary on a regular basis to jointly realize with social partners (the state, business, trade unions) public-awareness efforts on multi-level system of social security in all regions of Kazakhstan via structural subdivisions of the social sphere state agencies,  among other things via pension and obligatory social insurance institutions.

            Adequate standard of life is the target of joint care of the state and the person himself during the whole course of his active life.