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Use of ‘American model’ in pension reforms proposed

23.10.2019,13:03


October 23, Fineko/abc.az. We offer the "American model" in pension reforms.

ABC.AZ reports that this statement was made by Vugar Bayramov, the head of the Center for Economic & Social Development, when presenting a brief description of the mechanism prepared by the organization in connection with reforms in the social sphere.

He noted that in Azerbaijan there are citizens who have sufficiently large pension capital.

"There are even citizens with pension capital of more than AZN 150,000. We can apply the "American model" and provide the right for these citizens to early retirement, and, accordingly, for use of part of the capital until the age of 65. We propose to include in the legislation the concept of the minimum pension capital and the average pension capital," the expert economist emphasized.

Bayramov also proposed the following for citizens with large average pension capital: "They can get the right to pension before reaching the age of 65. For example, in a number of developing countries, including Russia, there is a need to differentiate the terms of retirement by age, on the labor pension. A citizen should be given a possibility of an early retirement age. In our pension legislation, it would be appropriate to define pension benefits earlier, before reaching the working retirement age. This will also make it possible to determine the age pension faster than the labour pension, so that the citizen could use the age pension earlier. In Azerbaijan, citizens who are not entitled to a labour pension start receiving benefits at the age of 67. We propose to change this figure so that the citizen is entitled to receive old-age benefits upon reaching 63 years."

By Elmir Murad