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Economist suggests 40% of pension capital to be financed by state

30.10.2019,11:46


October 30, Fineko/abc.az. Growth of the minimum pension capital is a positive trend. But as this amount increases, the number of those who will be eligible for a pension in the future may also decrease.

ABC.AZ reports that the statement was made by expert economist Vugar Bayramov who heads the Center for Economic & Social Development, when commenting on the conditions of retirement.

According to Bayramov, if in the future the minimum pension increases and reaches 300 manats, the minimum pension capital will increase up to 43,200 manats.

"This means that when the minimum pension reaches 300 manats, only those who accumulate pension capital in the amount of 43,200 manats or more will be able to retire without 25 years of experience. It is obvious that it will not be easy to accumulate 28,800 manats and 43200 manats in the future.

The pension reform in Azerbaijan envisages in the future the payment of pensions only at the expense of fees without the allocation of budget funds.

Taking into account the high level of hidden economy, as well as informal employment for a long time, it is incorrect to eliminate the contribution of the budget. From this angle, this mechanism needs to change. Therefore, we offer the state to finance 40% of the pension capital. That is, if a citizen has pension capital of 17,280 manats, then let him be paid 11,600 manats at the expense of the State Budget and he will be entitled to a pension. Otherwise, the difficulties of retirement in the near future are inevitable."

By Elmir Murad