The first phase of the reform, conducted from 2021 to 2025, is aimed at enhancing the financial stability of the pension system and improving the quality of life for citizens.
Key Achievements:
Increase in Pensions:
The average pension amount over the past five years has increased from 6,186 soms to 11,238 soms, which is nearly a twofold growth. In 2024, a decision was made that the minimum pension amount would correspond to the subsistence minimum.
Financial Volumes:
In 2021, 51 billion soms were allocated for pension payments, and by 2025 this figure had risen to 110.3 billion soms.
Digitalization:
A new automated information system of the Social Fund has been fully implemented. All pension recipients through banks and post offices have been transitioned to electronic format, and data exchange with 17 government agencies has been ensured through the 'Tündük' system, significantly reducing bureaucracy and eliminating the need for numerous certificates.
Changes in Legislation and the Social Sphere of the First Phase of the Reform
According to the new law adopted in 2024, the following benefits and changes have been introduced:
The basic part of the pension is now fully credited. Group III disabled individuals now receive the insurance part of the pension in full. The age for receiving a pension in case of loss of the breadwinner for children has been increased from 16 to 18 years. The period for receiving unclaimed pensions has been extended from 3 to 5 years.Effective Use of Pension Accumulations:
The state pension accumulation fund has expanded its investment opportunities by allowing investments in gold and precious metals. Citizens are also given the opportunity to use their accumulations for a down payment on a mortgage, participation in shared construction, or treatment for serious illnesses.
Support for Entrepreneurship:
For entrepreneurs, insurance contribution rates have been reduced from 27.25% to 12.25%. This has contributed to the legalization of the economy and the creation of new jobs.
The result of the first phase was the creation of a digital, transparent, and financially sustainable pension system.
Goals of the Second Phase of Reforms for 2026–2045
The second phase of the pension reform represents a long-term strategy aimed at strengthening the financial sustainability of the system and ensuring a decent pension for every citizen based on their individual contributions.
Priority Areas of the Second Phase:
Strengthening Insurance Principles:
Work will continue on the legalization of the economy and the expansion of formal employment. An increase in the Pension Fund's revenues is planned through the optimization of non-tax revenues.Digital Transformation:
The accounting of insurance experience and citizens' incomes will be transitioned to a digital format, allowing for the automation of the pension appointment process.Parametric Reforms:
The system will flexibly adapt to demographic and economic changes, which is necessary to fulfill obligations to future pensioners.Development of the Accumulation Component:
Mechanisms will be improved to enhance citizens' interest in pension accumulations and increase investment returns. The main indicator of the second phase is the coverage of the entire economically active part of the population by the social insurance system and minimizing the pension system's dependence on external subsidies.
Automatic Pension Appointment Upon Reaching Retirement Age
Starting from July 1, 2026, a new proactive service for the automatic appointment of pensions for citizens reaching retirement age will come into effect. A month before the birthday when a citizen reaches retirement age, data will be automatically collected from government information systems, and the pension appointment process will be carried out without personal application.
As part of the new mechanism, the Social Fund will be integrated with the information systems of other government agencies to obtain the necessary data about the citizen (work experience, personal data, etc.) in electronic format. If the data is complete and correct, the pension will be calculated automatically, and a notification of the appointment will be sent to the citizen via the 'Tündük' application. The notification will offer to choose a bank for opening an account, and the banking details will also be processed automatically.
The proactive approach will also be used for the appointment of disability pensions. The system is aimed at saving citizens' time, reducing the need to collect documents, minimizing the human factor, and increasing the transparency and efficiency of public services.
Change in Requirements for Minimum Work Experience
In Kyrgyzstan, the conditions for pension appointment regarding minimum work experience have been changed. These changes were made to the legislation in 2024.
Previously, to receive a full pension, women at the age of 58 and men at 63 were required to have 20 years of work experience. If the experience was insufficient, a partial pension was appointed.
Starting from July 1, 2024, the concept of "minimum experience" has been introduced, where having just 5 years of minimum experience is enough for a full pension appointment.
From January 1, 2026, the minimum experience will be 6 years and will increase annually. According to the plan, by 2045 it will reach 20 years and remain at that level.
Main Reasons for Changes:
- Ensuring the sustainability of the pension system;
- Encouraging citizens to official employment and payment of insurance contributions;
- Fair calculation of pension rights based on work experience and insurance contributions;
- Reducing informal employment and streamlining pension provision.
